“Kermia Ltd (Kermia), a wholly owned subsidiary of the Bank, has entered into an agreement to sell its 100% holding in Kermia Hotels Ltd together with adjacent land (together the ‘Assets’) in Ayia Napa, Cyprus to Aesara Investment Ltd (the ‘Purchaser’), selected as the successful bidder following a competitive process,” the Bank said in an emailed statement recently.
Aesara Investment Ltd is controlled by Vasilis Nicolaides and Demetris Nicolaides, shareholders of Atlantica Leisure Group Ltd.
Kermia Hotels Ltd owns and manages Kermia Beach Bungalow Hotel, situated on the outskirts of Ayia Napa, on Cyprus’ east coast.
The sale and transfer of the Assets is expected to be completed in the second quarter of 2016, following relevant regulatory approvals.
According to Bank of Cyprus, the sale consideration has been set at €26.5m. The transaction is expected to result in a Group net profit after tax of approximately €1.8m, based on carrying values as at 31 December 2015, and a net capital benefit of approximately €18 m, as a result of the current capital treatment of the Assets.
As a result, the Group’s Common Equity Tier 1 (CET1) ratio1 is expected to improve by 0.1 percentage points.
“The sale of the Assets is in line with the Group’s strategy of deleveraging through the disposal of non-core exposures and of focusing on core businesses, while, at the same time, strengthening its capital position,” BoC said.