To say Cyprus has had ups and downs in recent years is something of an understatement. On 1 January 2008, it adopted the euro. Like Othello’s ill-fated sojourn to the Mediterranean island, tragedy followed pretty soon after.
By mid-2012, an intensified version of the eurozone crisis hit the shores and by the following year, the Cyprus credit rating was junk status. The island’s second-largest bank, Laiki Bank, went under, and in March 2013 a €10bn bailout from the Troika of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), saved the day, but with strict conditions. Liquidity has clearly been a challenge since.
“Due to the lack of bank finance, overleveraged companies have been forced to seek other options,” says Demetris Shiouftas, group FD at Tsokkos Hotels. “This creates opportunities for companies with cash reserves or access to foreign bank finance to pursue M&A opportunities. It will take a few years before we are at a stage where the local banking system will be able to facilitate such deals.”