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China Glory deal for Venus Rock terminated

Aristo developers is reported to be in talks with two further potential investors for its Venus Rock development following the termination of its agreement with China Glory Investment Group.

Secret Valley golf course at Venus Rock

View over hole 9 of the Secret Valley golf course

DOLPHIN Capital Investors, which owns a 49.8% stake in Aristo Developers Ltd has announced the collapse of the deal for the sale of Venus Rock to China Glory Investment Group.

The news broke yesterday in an announcement to the London Stock Exchange.

Under the agreement, which was announced last year by the former chairman of the Bank of Cyprus and founder and MD of Aristo Developers Ltd, Theodoros Aristodemou, China Glory was to buy the Venus Rock development for €240 million.

In efforts to facilitate the sale the Cyprus Government relaxed the citizenship scheme for investors in March by reducing the amount necessary for foreign investors to secure a Cypriot passport to €2.0 million for someone participating in a collective investment worth more than €12.5 million. However, this relaxation expired on 1st June 2014.

In its announcement, Dolphin said:

“On 17 May 2013, shortly after the March Cypriot economic collapse, Aristo Developers Ltd (“Aristo”, the Company’s 49.8% affiliate) entered into a binding agreement with CGIG for the sale of the Venus Rock project for a fixed consideration of €241.5 million, plus €48.5 million in conditional deferred consideration, plus interest for any payment delays (the “Venus Rock Disposal Agreement”).

“Subsequent to the signing of the Venus Rock Disposal Agreement, CGIG has not met the contractually agreed payment deadlines for the project consideration under the Venus Rock Disposal Agreement, despite extensive renegotiations with Aristo to amend certain payment terms. As a result, Aristo sent a termination notice under the Venus Rock Disposal Agreement to CGIG which became effective as of today (Wednesday).

“Aristo is contractually entitled to retain the deposit payments received to date from CGIG, totalling €5 million, in the form of liquidated damages for CGIG’s breach of the Venus Rock Disposal Agreement, and has reserved its right to pursue further legal action against CGIG.

“Aristo has already been approached by two other interested parties for the absolute or partial sale of the Venus Rock project and is now advancing the discussions with them.

“Most importantly, Aristo will now recommence the sale of Venus Rock plots and homes, a major component of Aristo sales, which have been halted for the past year due to the transaction with CGIG.”

Readers' comments

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  • Diane says:

    “Aristo is contractually entitled to retain the deposit payments received to date from CGIG, totalling €5 million, in the form of liquidated damages for CGIG’s breach of the Venus Rock Disposal Agreement” and l am sure they will use this to go towards paying off the loans they have with the banks, yeah yeah dream on.

  • Steve says:

    Cyprus in general and Aristo in particular in this case, are seeing again the fall-out from the economic mess they are existing in.

    China Glory can see as clearly as everyone else the state of the property market and the depressed values, so they have decide to pull out for now. Aristo have been chasing implementation of this deal for the past year, because they are short of cash.

    Everyone owning or running a business knows that assets are fine but liquidity/cash flow issues can kill asset-rich companies if borrowing facilities dry up. The Chinese have lost €5mio, but if the development comes on the market via the liquidator, it can be had for a much lower price.

  • UBoat says:

    Well no surprise there at all. Nice to see that BOC has a good connection with Aristo …. call me cynical.

  • Stuart says:

    Even at a discount of nearly 22%, Hong Kong investor Charles Zhang of China Glory has realised that Venus Rock is just too expensive an undertaking to justify the commercial risk that accompanies any development in Cyprus at present.

    No doubt he will be looking elsewhere to spend his €290 million (sorry, that’s now only €285 million) which was to have been the start of a 1.5 billion euro project that would send a message abroad that Cyprus can still attract foreign investment.

    Any such ‘glory’ seems to have been spectacularly extinguished.

  • After the numerous empty promises we’ve been given by many companies and governments over the years, it isn’t surprising everyone has become cynical.

    It’s more than 25 years since initial studies were prepared for the five big marina projects – the only one that got underway was Limassol.

    The dining area at the Limassol marina has now opened with Pyxida Fish Tavern, Wagamama, TGI Friday’s, Pizza Hut, KFC, Derlicious, Caffé Nero, Hobo Mediterraneo and Marina Cool Bar.

    More restaurant facilities are due to be opened this month.

    Quite a few of the apartments and villas have been sold.

  • M Hannah says:

    Denton…..I Think The Star Ship mentioned is called “ENTERPRISE” the Planet is called “Fantasia XI”

  • Denton Mackrell says:

    I share Mike’s cynicism. Remember all the razzamataz about the Oroklini Theme Park (resurrected from previous similar wheezes for Pyla over the past 10 years)? As I mentioned at the time, the Oroklini villagers were (and remain) underwhelmed. Not a peep about it has been heard since, nor of the 500m Euro Hotel & Leisure Complex from several years back. And, shockingly, the Oroklini Golf Complex ‘dead cert’ that has surfaced three times over the past 20 years stubbornly refuses to materialize. Must be something wrong with their teleport on the Starship Fantasia.

  • Mike says:

    The only question remaining is why did it take so long to fall apart. It would appear that the quality of any such announcement of inward investment is inversely proportionate to the amount of hype and rhetoric that accompanies it. It seems that most (not all) pie in the sky announcements eventually fall apart. Lets hope the Limassol Marina project is too far advanced to crumble.

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