
Article 1 
The restructuring aid granted by Cyprus to Cyprus Airways Public Ltd is deemed to be compatible with the common market pursuant to Article 87(3)(c) of the EC Treaty provided that the conditions laid down in articles 2 to 5 are complied with.
Article 2 
Cyprus shall, by 31 December 2007, submit a report to the Commission on the progress of and the management of the restructuring plan.
Article 3 

1. Cyprus shall ensure that Cyprus Airways Public Ltd and Eurocypria are and continue to be operated as fully competing companies. Cyprus Airways Public Ltd and Eurocypria shall be run as separate legal entities. Neither Cyprus Airways Public Ltd nor Eurocypria shall be allowed to acquire any shareholding in the other and no equivalent capital operation, such as a merger, shall be carried out between both companies. All transactions between Cyprus Airways Public Ltd and Eurocypria shall be conducted at arm's length.
2. Paragraph 1 shall apply until either:
(a)) the loan guarantee granted by Cyprus to Cyprus Airways Public Ltd is brought to an end; or
(b)) Cyprus no longer has direct or indirect majority participation and/or control in the capital of both companies.
Article 4 
Cyprus shall ensure that the capital increase to the extent of CYP 14 million (EUR 24,3 million) in Cyprus Airways Public Ltd foreseen for mid-2007 respects the following conditions:

a)) the capital increase will not take place until a formal unconditional commitment to underwrite the successful outcome of the operation has been signed by the appointed underwriting commercial bank with the exception of the usual conditions concerning cases of force majeure, acts of war, terrorism and other similar cases;
b)) the State can only subscribe in the capital increase up to a maximum of 70 % thereof,
c)) the State subscribes the new shares issued on the basis of the same rights and under the same conditions, at the same price as the private investors, without prejudice to the proposed timetable for the underwriting by the bank of the successful completion;
d)) the operation must not be accompanied by any collateral agreement or implicit agreement whereby the State would exonerate the bank from its obligation if the recapitalisation offer was insufficiently subscribed or grant the bank any special discount on the issue price.
Article 5 
Cyprus shall provide the Commission with any reports and documents concerning both the participation of the State and of the bank and the private shareholders of Cyprus Airways Public Ltd and particularly the final contracts with the bank and the reports justifying the fees and eventual share price in the context of the capital increase.
Article 6 
This Decision is addressed to Cyprus.
Done at Brussels, 7 March 2007.
For the Commission
Jacques BARROT
Vice-President of the Commission