Cyprus Mail
Business Cyprus

BoC agrees to sell hotel in Romania

Bank of Cyprus (BoC) announced on Wednesday it has signed an agreement to sell its assets related to Societatea Companiilor Hoteliere Grand (GHES), a company incorporated in Romania and owner of the JW Marriott Bucharest Grand Hotel to Austrias STRABAG SE.

The sale consideration is €95 million, subject to adjustments to be made upon completion of the agreement, expected by the end of September and in any case no later than the end of October 2014.

The sale is subject to the fulfilment of specific conditions stipulated in the agreement.

The assets include a facility agreement between GHES, as borrower, and BoC – Romania Branch, as lender, 1,474,482 shares issued by GHES to an affiliate of the bank representing 35.3 per cent of GHES’ share capital, and a subordinated loan agreement between GHES, as borrower, and an affiliate of the bank, as lender.

The proceeds of the sale will enhance BoC’s liquidity position. The accounting loss from the transaction is around €1.0 million, but there is a positive impact of approximately €7.0 million on the Group’s capital position, after taking into account the reduction in risk weighted assets.

The sale falls under the Group’s strategy of focusing on core businesses and markets and disposing operations that are considered as non-core.

It is also in line with the Group’s decision to gradually reduce its presence in Romania with a view of eventually exiting Romanian market.

The sale achieves an exit from a sizable and specialised asset in the country and at the same time enhances liquidity by €95 million, BoC said.

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