Cyprus to hire independent advisor for privatisation of CSE

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The Cyprus Privatisation Unit has announced a tender for the appointment of a “reputable independent advisor” to prepare a strategic plan for the privatisation of the Cyprus Stock Exchange (CSE) by the end of March 2018.

According to the tender, the advisor should have “extensive expertise” in order to prepare a strategic plan for the Cyprus Stock Exchange, identify and recommend the optimal private sector participation option and, on the basis of the relevant decisions of the inter-ministerial committee for privatisations and/or the council of ministers, provide all transaction and other relevant services for the selection of the most suitable strategic partner/ investor“.

The fixed fee of the advisor amounts to €450,000 excluding VAT. The success fee, to be determined once the transaction is made, cannot be greater than €550,000. The indicative timetable for completion of the transaction is by the end of the first quarter of 2018.

The terms of reference include the maximisation of the CSE value at a time when the Cyprus stock market lacks liquidity.

In the first phase, the contractor should prepare and present before the privatisation unit a strategic plan.

The plan should include “based on analysis, the optimal strategy and way forward for the CSE and the identification and presentation of feasible private sector participation options and respective privatisation structures, together with an evaluation of these options and a recommendation on the preferred/most advantageous one for the Republic”.

In this context, it is provided analysis of the stock exchange industry, providing an analysis of the global and regional stock exchanges industry including trends and key developments with clear emphasis on countries/ markets/ trends that are relevant to Cyprus and the strategic plan for the CSE as well as benchmarking the CSE with other comparable stock exchanges.

The advisor should meet with CSE stakeholders and discuss any suggestions presented for the formulation of the strategic plan, identifying and suggesting corrective or mitigating actions for any financial, legal, technical and commercial or industry issues, reviewing and developing, if considered necessary, the current corporate governance structure of CSE, performing investor soundings, identifying the potential investor landscape and submitting an analysis of the profile/ key characteristics of such investors.

Also the investor should assess Cyprus’ existing legal and regulatory framework pertaining to the CSE as regards any changes that may be required because of the approved privatisation option to be implemented.

The consultant will be asked to recommend the private sector participation option and structure which is considered to be the preferred or most advantageous for the Government

It should also demonstrate for each option its advantages and disadvantages, benchmarking it in relation to the Government objectives and assessing its impact on the implementation of the strategic plan, the Cyprus economy, the CSE future and its valuation and the overall proceeds for the government.

In the second phase, after the required approvals from the inter-ministerial committee and the cabinet, the process enters the transaction stage, which includes the provision of services in relation to possible rules changes and managing legal issues related to staff .

The contract will remain in force for an additional period of six (6) months following the signing and closing of an agreement with a strategic partner/ investor, during which the contractor will provide any ad-hoc support and analyses that may arise in order to assist the government in their communication strategy with the stakeholders of the Cyprus Stock Exchange as well as with the general public. (CNA)

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