THE ports authority yesterday became the third semi-government organisation to lend money to the cash-strapped state when it announced it would provide €50 million through the purchase of three-month treasury bills.

It follows the decision of telecommunications company CyTA to pitch in €101 million and the human resources development authority’s (HRDA) contribution of €24 million.

The state, shut out of international capital markets for more than a year, has used short-term domestic borrowing to refinance its debt.

This has become harder after its sovereign rating was cut to junk by all three major ratings agencies, making it impossible for banks – which have problems of their own – to purchase government debt.

The two biggest, Bank of Cyprus and the now state-controlled Popular Bank, have sought state assistance to the tune of €500 million and at least €1.8 billion respectively.

In turn, the state has asked for EU assistance, but that is not expected before September.

The state needs to refinance around €500 million worth of debt in the next couple of months.

“We think it is our obligation to help the state overcome the difficult financial situation it is in, provided our needs allow,” said ports authority chairman Chrysis Prentzas.

The board’s decision was unanimous, he added.

While the ports authority and HRDA pledged the full amount sought by the state, CyTA said it could only afford some €101 million, instead of the €250 million the government was reportedly looking for.

On July 4, the government said it would raise €250 million in a private placement of three-month treasury bills today.

The transaction was arranged with domestic institutional investors and the yield would be known after the issue, the finance ministry said. 

But a stock market announcement yesterday said the value of government treasury bills to float today is €151 million.

The government’s move to borrow money from semi-state organisations has been criticised by the opposition, with DIKO vice chairman Nicolas Papadopoulos suggesting the state was on the brink of default.

Government spokesman Stefanos Stefanou has rubbished the suggestion, describing Papadopoulos as a scare-monger.