LONDON (Alliance News) - AIM-listed Clear Leisure PLC Tuesday said its Italy-based travel operator unit has temporarily suspended operations after running into financial difficulties as its African holidays were hit by the terrorist attack in Kenya and tourist killings in Madagascar, and after new management also found financial irregularities at the unit.
The company said the new management of Italy-based ORH SpA, appointed in July, had found "a number of financial irregularities within the African subsidiaries", which are now being investigated by external consultants.
Clear Leisure said the irregularities were found after ORH's new management were looking at the heavy financial commitment of pre-booked charter flight seats and the cost of running five of its hotels.
It said the decision to suspend operations came after demand for ORH's holidays sank and prices came under pressure after the recent terrorist attack on a shopping mall in Kenya and the killing of French and Italian tourists in Madagascar. It is also being hit by what it described as a "continuous" deterioration in the Italian economy and a reduction in consumer spending.
Clear Leisure said it will update shareholders about the problems "in due course".
ORK is one of Clear Leisure's key business units. The investment company set up to develop a portfolio of leisure and entertainment assets, mainly in Italy, also part-owns Italy's third-largest sushi chain, Sosushi, water theme park Ondaland, and a 165 acre piece of land which has planning permission for a major theme park, hotel, shopping complex and commercial activities, among other assets. The latter is one of three assets on its for sale list.
Clear Leisure shares were down 44.8% at 1.6 pence Tuesday morning, the biggest decline on AIM.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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