Cyprus Asset Management Company (KEDIPES) has repaid to the state €1 billion in cash, since the start of its operations five years ago, 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 start of its operations," Papadopoulos said, noting, in addition, that real estate approaching €140 million will be also transferred to the state soon.

In the first quarter of 2023, an amount of €60 million was paid, 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.

KEDIPES was established following the sale of the former Cyprus Cooperative Bank (CCB) to Hellenic Bank, with a mandate to wind down non-performing exposures held by the CCB. KEDIPES’ aim is to manage these loans and real estate with a view to repay €3.5 billion of state aid paid by the Cypriot government to facilitate the transaction.

According to Papadopoulos, 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 "Mortgage to Rent" Scheme. For the implementation of the Scheme, a positive response from the European Commission's Directorate-General for Competition is expected soon, Papadopoulos noted.

KEDIPES Chairman underlined that the company's cash inflows have come under significant pressure due to the cumulative effect of the ongoing suspensions of foreclosures, 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 present improved, when compared to the cash inflows of the first quarter.

"We are concerned about the law proposals that are in the foreground at this time which concern changes to the legal framework governing foreclosures, with the aim of suspending/discontinuing the foreclosure process on the basis of legal proceedings for reasons such as disputing the balance of the debt," adds Papadopoulos in his statement.

He noted that, as KEDIPES stated in a letter submitted to the Finance and Budget Committee of Parliament, the proposed amendments will deprive KEDIPES of the possibility of effectively using the tool of foreclosures, where 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 aid.