Minoan Group

www.minoangroup.com
Ticker: MIN Exchange: AIM

The Minoan Group operates a resort development division currently progressing a five star plus quality resort in Crete.

Latest Reports

Simplified capital structure, reduced dilution

Published: 21st July 2020

Minoan Group will publish its interim results for the six months ended 30 April 2020 by the end of August, and at that point provide an update on the status of its development project in Eastern Crete. In the meantime, it has reorganised its secured debt, simultaneously cancelled a net 52m warrants (plus rights to future warrants) and raised £205,000 via a placing at 1.1p/share.

The proposed restructuring, which is subject to shareholder approval at a General Meeting on 6 August will simplify the group’s capital structure and materially reduce potential future dilution. This puts Minoan in a better position to manage its ongoing working capital requirements as it progresses its project. Lockdown has delayed more detailed interactions with potential JVs and partners, preventing face to face meetings and site visits. 

The £0.2m raised in the placing will provide some working capital. The statement confirms that the Board has taken significant action to reduce ongoing running costs, to include a decision by Directors to defer and/or forego fees until the group has moved forward with the project.

Finally, the project will coincide with Greek plans to entice foreign pensioners via the offer of a flat rate of income tax at 7% for retired foreigners who transfer their tax residence.

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The tide has turned

Published: 14th July 2019
Minoan Group has a long-standing project for a luxury leisure, villa and holiday complex in Cavo Sidero in Eastern Crete.

Recent events, notably Greece’s switch to a more business-friendly administration after its General Election last weekend, continue to shift the prevailing political and economic winds in Minoan’s favour. This result followed the swing to the right in the Regional, Municipal, and European elections in May.

We now see the backdrop to Minoan’s plans as more stable, because of changes to various external factors:
- An improved political backdrop for business and investment post the various election victories by the more business-friendly New Democracy party
- More receptive international capital markets, particularly since the start of this year, reflected in a current record low yield on benchmark 10-year Greek government bonds (matching that of the US 10-year Treasury at just over 2%)
- The recent performance and relatively stable outlook for Greece’s economy. That has been mirrored in the performance of local hotel investment and development markets, and the outlook for tourism generally.

To recap, the previous Syriza government approved the group’s scheme in Crete in 2016, with all appeals cleared in 2017. That followed various approvals from all previous governments. This provided the green light for a projected €250m hotel, residential and leisure development.

However, the current equity valuation reflects the group’s long-running negotiations over legal and political issues during a 25-year period, as well as the risks inherent in financing and delivering a substantial scheme. Nevertheless, it appears to discount much of the potential upside when the project begins to be realised.

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