C.C.C. Tourist Enterprises Public Company Ltd presents the Interim Management Statement of the Group for the period from July 1st, 2013 until today. The Interim Management Statement has been prepared in accordance to the provisions of Article 11 of the Transparency Requirements (Securities Admitted to Trading on Regulated Market) Law of 2007 (Ν190 (I)/2007).
The principal activities of the Group remain the same as those in 2012, which are the erection and development of hotels, the carrying on of the business of hoteliers, the development and promotion of tourism and touristic activities and the development of luxurious villas for sale.
During the reporting period, the Group shows losses compare to profit for the corresponding period in 2012. This is due to the significant decreased of Group’s turnover during the reporting period. After the Eurogroup decision in March 2013 there was a significant decrease in the reservations. We would like to note that the Group from 1st of January until today shows increased losses compared to the corresponding period in 2012.
Events and transactions
Cyprus and the Eurogroup (together with the International Monetary Fund) reached an agreement on 25 March 2013 on the key elements necessary for a future macroeconomic adjustment programme which includes the provision of financial assistance to the Republic of Cyprus of up to €10 billion. The programme aims to address the exceptional economic challenges that Cyprus is facing and to restore the viability of the financial sector, with the view of restoring sustainable economic growth and sound public finances over the coming years. The Eurogroup decision on Cyprus includes plans for the restructuring of the financial sector and safeguards deposits below € 100.000 in accordance with EU legislation.
On 29 March 2013 the Central Bank of Cyprus issued a decree concerning Laiki Bank and Bank of Cyprus by implementing measures pursuant to the Resolution and Other Credit Institutions Law of 2013. The Group’s cash held with banks affected from the above measures were €127.607 deposits in Bank of Cyprus. The Bank of Cyprus uninsured depositors have received new shares through a conversion of 47,5% of their deposits (amounts over €100.000). These instruments have not been admitted for trading in the Stock exchange as yet. The fair value of these instruments is still unknown and very difficult to calculate due to the unavailability of public information and active market. Management’s preliminary assessment is that the Croup’s deposits held in Bank of Cyprus have suffered an impairment of approximately €127.607.
C.C.C. Tourist Enterprises Public Company Ltd, has reached an agreement with Emerald Coast Properties Ltd, “The Investor”, according to which the Company’s subsidiary, L’Union Nationale (Tourism & Sea Resorts) Ltd, will issue at par 20.000.000 (twenty million) shares of a new class, with a nominal value of €1 each, to be subscribed by the Investor, with the Company waiving its pre-emption rights. After the issue of the said shares, the Company and the Investor will each have a 50% share in L’Union Nationale (Tourism & Sea Resorts) Ltd. The conclusion of the transaction, which is subject to the due diligence report, the scope of which is to verify certain parameters and representations, will be not later than the 31st of January 2014, will be effected with the issue and allotment of shares to the Investor and the payment of the Subscription Price of €20 million to L’Union Nationale (Tourism & Sea Resorts) Ltd.
The raised funds will be primarily used for the renovation of Le Meridien Limassol Spa & Resort, as well as for the strengthening of its working capital. The Company’s Board of Directors considers the conclusion of the deal a very important achievement, since without burdening of its gearing the Resort will be further upgraded thus making it competitive to the upscale market of the region, opening up the prospect for the considerable improvement of its financial results to the benefit of the Company’s shareholders. Equally important, in light of the unprecedented difficulties faced by Cyprus’ banking sector, is the improvement of its liquidity.
The short term effect of the transaction in the results of C.C.C. Tourist Enterprises Public Company Ltd is expected to be negative as the asset values had not been restated following the Eurogroup decision and its effect. The exact impact will be calculated on the conclusion of the agreement and will then be announced.
Developments and Prospects
The Board of Directors and the Management believe that under the current circumstances and taking account the operating environment of Cyprus and the conditions created after the Eurogroup decisions on 25 March 2013 and the global crisis, the results for 2013 might show fluctuations, which due to the uncertainties in the market, might be difficult to predict.
C.C.C. Secretarial Ltd
Limassol, 20 November 2013