The two Municipalities and Piraeus Bank (Cyprus) Ltd concluded an amendment to the loan terms agreement of the Sewerage Councils of Paralimni and Ayia Napa.
As jointly announced by the Presidents of the Sewerage Councils of Paralimni and Ayia Napa, Theodoros Pyrillis and Giannis Karousou, as a result of the changes made, "the installments of the loans are reduced to € 3,190,000 per year from € 4,661,000 previously valid in annual 788,000.
The improvement in loan repayment terms, combined with the huge savings that have resulted from the operation of the Wastewater Treatment Plant, which exceeds € 2,000,000 per year, have resulted in the financial situation of the Lakeside and Ayia Napa Sewerage Councils being in very good condition".
The announcement
The consortium of the Sewerage Councils of Ayia Napa and Paralimni wishes to inform the public that after persistent efforts of the Presidents of the two councils which lasted several months, it was possible to modify the terms of the loans of the two councils with Piraeus Bank (Piraeus). The terms and interest rate of the initial loans of € 70,000,000 which were concluded in 2009 with a Government Guarantee to finance the remaining part of the project as well as to repay overdue loans, were considered very favorable to the councils at the time as long as provided for an interest rate of 2.25% plus euribor, with a 5 year grace period and a 20 year capital repayment after the grace period.
Unfortunately, the continuous deterioration of the creditworthiness of the Republic of Cyprus since then, raised the key interest rate to 3.85% which, despite the economic crisis that hit Cyprus, was still satisfactory. Nevertheless, the consortium, within the framework of its efforts to reduce the operating and financial expenses of the councils.
Has reached an agreement to amend the contract as follows:
(1) Reduction of the key interest rate to 2.5%
(2) Extension of the loan repayment period to 25 years out of the remaining 18,
(3) Addition of an additional term to the contract which offsets an existing term which gave the bank the right to increase the key interest rate in case of deterioration of the creditworthiness of the Republic of Cyprus.
As a result of the above changes, the loan installments are reduced to € 3,190,000 per year from € 4,661,000 previously valid with annual interest savings to € 788,000.
The above improvement in the loan repayment terms combined with the huge savings that have resulted from the operation of the Wastewater Treatment Plant which exceeds € 2,000,000 per year, the financial situation of the Councils is currently in a very good condition.
The consortium of the two councils would like to thank the management of Piraeus Bank (Cyprus) Ltd for the very constructive attitude it has maintained throughout the negotiations as well as for the excellent cooperation it has had with the councils so far.
On behalf of the consortium Giannis Karousos - Chairman of the Sewerage Council of Ayia Napa Theodoros Pyrillis - Chairman of the Sewerage Council of Paralimni