“The amount is considered satisfactory”, stated the Chairman of the Board of KEDIPES, Lambros Papadopoulos
In its almost five years of operation, KEDIPES has repaid to the state a total amount of €1 billion in cash related to the State aid received by the former Cyprus Cooperative Bank, the Chairman of the Board of Directors of KEDIPES, Lambros Papadopoulos, said in a statement. Monday.
“The amount of one billion in cash is considered satisfactory, taking into account the significant internal and external challenges that the company has faced since the beginning of its operations”, noted Mr. Papadopoulos, noting, in addition, that real estate approaching €140 million will be transferred to the state soon.
In the first quarter of 2023, an amount of €60 million was paid against the state aid, increasing the total amount of state aid repayment in cash to €940 million from the start of KEDIPES operations in September 2018 until the end of the first quarter of 2023. Additionally , following a decision of the Board of Directors, a payment of €60 million was made on June 15, 2023, increasing the total amount of state aid repayment in cash to €1 billion.
According to Mr. Papadopoulos, the KEDIPES also maintains additional cash reserves of approximately €150 million, including €60 million related to possible future real estate purchases, within the framework of the “Rent Against Installment” Scheme. For the implementation of the Plan, a positive response from the General Directorate of Competition of the European Commission is expected soon, Mr. Papadopoulos reminds.
Financial Developments of the First Quarter 2023
Total cash inflows in the first quarter of 2023 amounted to €106.7 million, showing a decrease of 6.5% compared to €114.1 million in the fourth quarter of 2022 and a decrease of 8.3% compared to €116.3 million in the first quarter 2022. It is noted that the inflows of the first quarter of 2023 amounting to €105.6 million from the management of loans and properties, include the completion of the sale of specific high-value properties, excluding which, the relevant inflows of the quarter show a decrease of 24% compared to the first quarter of 2022.
The cash inflows of KEDIPES came under significant pressure due to the cumulative effect of the ongoing universal suspensions of sales, Mr. Papadopoulos said, “an issue we have warned about in the past,” as he noted. In addition, the problems that arose for a long time in the Land Registry's electronic systems also had a negative impact, he said, noting that the normalization of the above challenges helped the results of the second quarter of 2023 to be presented improved with the comparable cash inflows of the first quarter.
Cumulative cash inflows from the start of operations of KEDIPES on September 1, 2018 until March 31, 2023 amounted to €1,770 million. Collections from the management of loans and real estate amounted to €1,695.5 million or 21.1% of its nominal value loan and real estate portfolio amounting to €8,051 million as of 1/9/2018.
Operating expenses and asset management expenses in the first quarter of 2023 amounted to €26.9 million, increased by 3, 7% from €25.9m in Q4 2022 and down 4.6% from €28.2m in Q1 2022.
Grants in nominal value stood at €6,127m at the end of the first quarter of 2023 from €6,144m at the end of the fourth quarter of 2022 and €6,374m at the end of the first quarter of 2022. The total deleveraging since the start of operations of KEDIPES from September 1, 2018 to March 31, 2023 amounted to 16.9% and excluding contractual loan interest amounted to 35.3%.
Total restructuring and/or recovery solutions through management company Altamira amounted to €93m for the first quarter of 2023 compared to €179m for the fourth quarter of 2022 and €144m in the corresponding quarter of the previous year. According to Mr. Papadopoulos, the reduction is due to the important reasons mentioned above which negatively affected both the restructuring and/or recovery solutions and the real estate sales.
The overall solutions since the start of operations KEDIPES until the first quarter of 2023 amounted to €3,361 million or 45.6% of the initial loan balance of €7,371 million.
Assets at the end of the first quarter of 2023 amounted to €6,829 million in nominal value and include cash of €148 million, real estate with a total value of €525 million and servicing loans of €660 million. The total deleveraging since the start of operations from September 1, 2018 until March 31, 2023 it amounted to 17.2% and excluding contractual loan interest to 33.7%.
Net cash flow, after the payment of expenses and liabilities in the first quarter of 2023 amounted to €78.3 million, marking a decrease of 11.1% compared to €88.1 million for the fourth quarter of 2022, and a decrease of 10.7 % compared to €87.8 million for the first quarter of 2022. Cumulatively since the start of operations of KEDIPES the net cash flows after repayment of expenses amounted to €1,006.8 million.
Disposal concerns
“We are troubled by the proposed law proposals that are in the foreground at this time which concern changes in the legal framework governing sales, with the aim of suspending/stopping the sales process on the basis of judicial proceedings for reasons such as disputing the balance of the debt”, adds Mr. Papadopoulos in his announcement.
He noted that, as KEDIPES mentioned in the letter he submitted to the Finance and Budget Committee of the Parliament, the proposed amendments will deprive KEDIPES of the possibility of effective use of instrument of divestments, where it is deemed necessary and consequently will have a negative impact on cash inflows, resulting in the reduction of the ability of KEDIPES to repay the state support.,
Loan Guarantee Scheme
In relation to the Asset Protection Scheme concerning Hellenic Bank, the contractual value of the assets covered by the Scheme on 12/31/2022 amounts to €1,561 million compared to €2,608 million at its start, showing a total reduction of 40% since the start of the Scheme. The reference price of the assets on 31/12/2022 amounts to €1,220 million compared to €2,271 million at the start of the Plan (reference price is the amount covered by the Plan) showing a total decrease of 46% from the date start.
As part of the Plan, until today, Hellenic Bank has submitted claims totaling €105.5 million for the period September 1, 2018 to December 31, 2022. KEDIPES has made total payments amounting to €78.2 million or 74% of claims submitted to date. KEDIPES and Hellenic Bank are in the process of consultation to confirm the remaining amount of the claims, adds Mr. Papadopoulos.
The payments of Hellenic Bank to the Republic of Cyprus as guarantor of the Plan amounted to a cumulative amount of €43, 1 cm.
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