Casinos and marina operator Cubus Lux is near to finalising the purchase of the potential Olive Island resort on the Dalmatian coast.
Cubus Lux has two options over the resort which will cost €110m to develop. There are plans to build 126 villas, 305 apartments, a marina, shops, restaurants and a four star hotel with 500 beds. The villas and apartments will be pre-sold to customers who can put them into a rental pool that will be managed by the hotel operator. The owners get 70% of rental income and Cubus Lux the rest. So far 71 units have been pre-sold and the buyers have paid a 25% deposit.
Cubus Lux will pay €30m in cash and 39m shares for the development. Management plans to raise the cash it requires through a convertible bond. It will have a five year life and convert at a 35% premium to the share price prior to its issue. Management hopes that it will be able to exercise the options before they run out on 25 December and complete the acquisition in January.
The company’s first marina opened on the island of Uglijan in May. By the end of October there were long-term contracts of between one and three years for 127 boats. The average charge is €4,500 a year. The owners pay for a year upfront but only part of that was recognised in the figures for the six months to September 2007.
Turnover was £886,000 and Cubus Lux made a profit of £244,000 thanks to a £774,000 gain on the sale of a plot of development land.
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