Aqual Sol: Sale of land and property against €16,2m - Profit Warning for six-month results 2008
8/7/2008 9:35
Following its announcement of 20/6/2008, the Board of Directors of AQUA SOL HOTELS PUBLIC COMPANY LTD announces that it has proceeded to the signing of the agreements dated 30/6/2008 for the sale of the 3 plots of land in Ayia Napa owned by the 100% subsidiary Aegisthos Hotels Ltd for the amount of €9,4 m (£5,5 m) to the company A Chacholis Developers Ltd and of the freehold Paschalia Hotel in Protaras for the amount of €6,8 m (£4,0 m) to Stigaco Ltd, a company related to A Chacholis Developers Ltd. Both transactions completed on 7/7/2008 by the transfer of ownership of the properties to the buyers and the simultaneous receipt of the sale proceeds by cheques.
Furthermore we inform the public that the above transactions have been made on an arm’s length basis.
The above transactions will result to an accounting loss of about €1,0 m (£0,6 m), as follows:
Paschalia Hotel, Protaras
The profitability of this hotel was unsatisfactory with a continuing decrease over the last years; also, significant amounts are required for renovations. The hotel was initially acquired by the Company on 31/12/1999 for €4,4 m (£2,6 m). Its net book value at 31/12/2007 was €11,8 m (£6,9 m) and the accounting pre-tax loss is expected to be about €5 m (£2,9 m). As part of the agreement the Company will continue to operate the hotel until 30/10/2008.
3 plots of land, Ayia Napa
The 3 plots were initially acquired in 2002 for €3,1 m (£1,8 m) with the intention of building a hotel. Based on studies, the negative conditions that prevail in the tourist industry in Cyprus over the last years do not render a new hotel as viable. In the meantime, the Group studied alternative ways for the development of these plots without any satisfactory outcome. As a result, the Group decided that it’s better to proceed to the disposal of the said plots of land than to build a new hotel. The net book value of the said plots of land was €5,4 m (£3,2 m) and the accounting pre-tax profit is expected to be about €4,0 m (£2,3 m).
As a result of the above transactions, the net cash inflow for the Group will be €16,2m (£9,5 m) before any tax payments.
Additionally, we inform the public that the results of the Group for the first six months of 2008 are expected to be reduced as compared to those of 2007 mainly due to the effect of the above transactions.
Furthermore we inform the public that the above transactions have been made on an arm’s length basis.
The above transactions will result to an accounting loss of about €1,0 m (£0,6 m), as follows:
Paschalia Hotel, Protaras
The profitability of this hotel was unsatisfactory with a continuing decrease over the last years; also, significant amounts are required for renovations. The hotel was initially acquired by the Company on 31/12/1999 for €4,4 m (£2,6 m). Its net book value at 31/12/2007 was €11,8 m (£6,9 m) and the accounting pre-tax loss is expected to be about €5 m (£2,9 m). As part of the agreement the Company will continue to operate the hotel until 30/10/2008.
3 plots of land, Ayia Napa
The 3 plots were initially acquired in 2002 for €3,1 m (£1,8 m) with the intention of building a hotel. Based on studies, the negative conditions that prevail in the tourist industry in Cyprus over the last years do not render a new hotel as viable. In the meantime, the Group studied alternative ways for the development of these plots without any satisfactory outcome. As a result, the Group decided that it’s better to proceed to the disposal of the said plots of land than to build a new hotel. The net book value of the said plots of land was €5,4 m (£3,2 m) and the accounting pre-tax profit is expected to be about €4,0 m (£2,3 m).
As a result of the above transactions, the net cash inflow for the Group will be €16,2m (£9,5 m) before any tax payments.
Additionally, we inform the public that the results of the Group for the first six months of 2008 are expected to be reduced as compared to those of 2007 mainly due to the effect of the above transactions.
