It seems rather difficult for Dolphin Capital Investors to sell their minority stake in Aristo Developers. As the investment firm says in its financial results, disinvestment from Aristo Developers requires the drafting and execution of an exit strategy for a minority package – at a tight timetable as well.
The 47.9% that it controls in the Cypriot development company is considered to be one of the most significant investments for Dolphin, as regards returns for shareholders. As a matter of fact, Dolphin received a dividend of 2 million euros from Aristo in the fourth quarter of 2018.
For 2018, Aristo sales reached €67.2 million, up by 2% from 2017 due to higher prices per square metre. Overall, the Cypriot company sold 115 homes and plots, according to Dolphin. In the previous year, Aristo continued recording very good sales to Chinese buyers, surpassing 50% of the total.
Specifically, 59% of the company’s sales were to buyers originating in China, 15% to residents of other Asian countries and 12% to residents of the Middle East and North Africa. The percentage of buyers from Russia rose to 6%. Sales to Cypriots and residents of other EU countries accounted for only 4% of the total.
At the same time, 2019 appears to be even better for the Cypriot company with sales of €17 million for the first two months, up by 58% year-on-year.
The vast majority of the company’s sales are based on the island’s naturalisation scheme and therefore a significant proportion of sales revenue remains in so-called escrow accounts until the granting of citizenship and completion of the construction of properties purchased at design stage.
Aristo had 21.5 million euros committed to such accounts by end of 2018, and it is estimated that 8 to 20 months will be needed for essential procedures to be completed.
“As applications come to maturity and properties are delivered, the company’s available cash is expected to show a significant increase,” it is noted in the results.
“Because of this, we are actively looking at ways to disinvest from Aristo, for capitalisation purposes but also to extract more value in the form of an additional dividend distribution from the company’s operating profits,” it also said.