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.”