The Cypriot Ministry of Finance is working on a bill that will allow the competent authority to assess whether foreign investment may affect the security or public order of Cyprus.

The tangible interest of the Lone Star Funds investment fund in the Bank of Cyprus, the island’s largest systemic bank, since last May seems to have played a catalytic role in the creation of a note with such characteristics.

Such as “K” knows Based on the main elements of the bill being processed by the Cypriot Ministry of Finance, when the bill is passed into law, it will be checked whether the company in which FDI is planned or made is active. in a particularly sensitive sector that concerns vital infrastructures (critical infrastructure), whether physical or virtual, including infrastructure in the fields of energy, transport, water, healthcare, communications, media, data processing or storage, defense, electoral or financial services including systemic lending institutions, sensitive assets, and land and real estate that are key to the use of these infrastructures.

Lone Star’s interest in the Bank of Cyprus was the catalyst for the creation of the bill.

The creation of the bill by the Cypriot state was indeed “instigated” by the three Lone Star proposals for the Bank of Cyprus, but may also have been “instigated” by previous rumors of the National Bank of Greece “flirting” with the Bank of Cyprus. Recall that in May, the National Bank officially denied through the Capital Market Commission reports of its merger with the Bank of Cyprus, entering the strategic investor scheme and limiting the share of participation of current shareholders in the National Bank. The draft law on the control of foreign investment is intended to harmonize with the specific articles of the European Union and provide a framework for the control of foreign direct investment in the Union.

The Bank of Cyprus has confirmed that it has received and unanimously rejected three voluntary, conditional, non-binding offers from Lone Star regarding a possible cash offer for all issued and issuable share capital. The first offer was received on May 5, 2022 at a price of EUR 1.25 per share of the Bank of Cyprus. The second offer was received on May 25, 2022 at a price of EUR 1.38 per share, and the third offer was received on July 8, 2022 at a price of EUR 1.51 per share. According to an official statement from the Bank of Cyprus, its board of directors believes that Lone Star has significantly underestimated the value and prospects of the company, at the same time, the Fund does not take into account the difficulty of realizing its acquisition, given the strategic importance of the Bank to Cyprus.

Finally, it is worth noting that Lone Star was interested in the majority of Hellenic Bank’s shares in 2018 when the latter took over a healthy portion of the Cyprus Cooperative Bank.