KEDIPES’ cash inflow at the highest level since the COVID-19 pandemic

State-owned asset management company, KEDIPES, posted cash inflow of €115.5 million in the fourth quarter of 2021, which is the highest level since the outbreak of the COVID-19 pandemic, marking an increase of 28.3% compared with the previous quarter.

For 2021 KEDIPES paid the government €250 million, with total payments since the commencement of operations amounting to €570 million, with the company’s President Lambros Papadopoulos stating that in combination with the Ledra project involving the sale of performing loans with a nominal value of €476 million, KEDIPES payments to the government will exceed €1 billion by 2022.

KEDIPES began operations in September 2018, following the sale of the former Cyprus Cooperative Bank’s (CCP) performing assets to Hellenic Bank. KEDIPES aim to wind down the CCP’s non-performing assets to repay the state aid amounting to €3.5 billion.

According to the results, cash inflow in the fourth quarter of 2021 amounted to 115.5 million, up by 28.3% compared with the previous quarter, while cash proceeds in 2021 amounted to €403 million marking an increase of 29% compared with €311 million in 2020.

Cumulative cash inflows since September 2018 amounted to €1.22 billion, exceeding KEDIPES’ business plan, Papadopoulos said.

The KEDIPES President said that proceeds were also boosted by the new agreement with Altamira Cyprus, who manages KEDIPES’ assets which is now is performance-based.

With the successful conclusion of the project Ledra we will be able to exceed €1 billion in payments to the government in 2022, Papadopoulos added, noting that KEDIPES is currently in exclusive negotiations with the project’s preferred bidder.

The Sales Purchase Agreement is expected to be finalized in the coming month with the conclusion of the transaction expected within the first half of 2022, he said.

Operating expenses and asset management expenses in the last quarter of 2021 amounted to €33.4 million, increased by 30.8% compared with the previous quarter, while operating and asset management expenses throughout 2021 amounted to €113.2 million up by 7% compared with 2020.

Total cash inflow since the commencement of operations amounted to €1.22 billion.

“We have a long way ahead,” Lambros Papalambrianou, Chief Financial Officer said, noting that under KEDIPES business plan, the company will require a total cash inflow of €4.8 billion to repay the €3.5 billion state aid.

By the end of 2021, KEDIPES total assets (net of interest capitalization) amounted to €5.91 billion compared with €8.25 billion in September 2018 with total deleveraging amounting to €2.34 billion.

Furthermore, Papadopoulos said KEDIPES awaits trade unions to proceed with a “constructive dialogue” concerning the reduction of the company’s staff, as the voluntary retirement scheme attracted only 39 persons compared with the target of up to 130 persons.

He said that redundancies are on the table, recalling that an updated report by an external advisor showed that KEDIPES staff should decline to 300, compared with 360 today.

Papadopoulos overruled the possibility of new or a more generous VRS noting that KEDIPES cannot absorb the cost of a new plan, as it has a certain life cycle which according to its business plan goes up to the end of 2027.