12th Feb 2014 11:44
LONDON (Alliance News) - Minoan Group PLC Wednesday said it has decided to buy back the 20% stake in its travel and leisure business that it had sold last year because it will allow it to pursue a more flexible acquisition strategy for that unit.
In a statement, Minoan said it will pay GBP930,000 for the 20% stake, up from the GBP770,000 it sold the stake for last July. It said the premium reflects the growth of the business, and pointed out that under a "buy back" arrangement included in the sale deal, it could have had to pay up to GBP1.1 million.
The stake buy means Minoan now expects revenues from its continuing travel businesses to be about GBP50 million for 2013, up from its previous expectation of about GBP45 million, though reported profit is not expected to be impacted.
Minoan also said it has received the first GBP1 million investment in its planned Greek resort from The Candia Investment Corp. In June 212, Candia had agreed to take an economic interest of up to 10% in the project for GBP2 million, payable in tranches. It now has a 5% stake in return for the first half of the investment.
Under the deal, Candia has the right to buy a further 25% share in the project for an additional GBP12.5 million during an agreed period after the project gets environmental approval. The companies haven't disclosed the period. Minoan submitted its strategic environmental assessment for the project in December last year and the application has been fast-tracked by Greek authorities.
Minoan owns and operates a number of travel agencies and also operates a resort development division currently progressing the resort in Crete. The Greek project will include a number of small to medium sized hotels that the company hopes will meet extremely high standards, both in terms of the service offered and environmental credentials.
"I am very pleased that we have been able to complete the buy in of the 20% stake in our T&L Business from existing resources and hope to update shareholders with further positive developments for the group's business in both Greece and the UK in the very near future," Minoan Chairman Christopher Egleton said in the statement.
Minoan also said it has also reached a deal with certain debt providers to revise the terms of their loan agreements so that about GBP1.2 million can be repayable in cash, or in shares at 8.5 pence each, at the lender's choice.
Minoan Group shares were down 2.2% at 9.9 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Minoan