LONDON (Alliance News) - Clear Leisure PLC saw its shares rise early Monday after its stake in Italy's Mediapolis rose to 82.4% after it subscribed for EUR185,000 new shares, funded by a EUR200,000 7% loan note it issued to its major Swiss shareholder, and said the Italian unit is now gearing up to sell its land and development rights.
Clear Leisure also said it expects to be able to release its 2014 accounts in a timely manner because Mediapolis' accounts have been completed and are set to be approved later this month.
In a statement, Clear Leisure said the loan note is repayable on October 31 or is convertible into shares at 1.5 pence each. The right to convert rests with the lender.
Clear Leisure also said Mediapolis has mandated Italian real estate advisory Avalon Consulting to help it dispose of its development rights for a price based on the independent valuation appraisal of EUR35.6 million announced on August 18, 2014.
It said the mandate covers the marketing of the land and development rights for about EUR22.0 million in cash, or through an asset exchange for a liquid, listed stock of an authorised real-estate fund in the region of EUR34.0 million.
The board of Mediapolis has also decided to continue its legal claim against Regione Piemonte for EUR26.0 million in damages, and is expecting that a formal and final presentation of its case will be made by Mediapolis' lawyers on or before February 15, Clear Leisure said.
It added that its Chief Financial Officer Nilesh Jagatia has been appointed Chief Executive of Mediapolis, enabling the Italian unit to complete its annual audit and call its annual general meeting on January 26. Shareholders will vote to approve Mediapolis' 2014 report and financial statements at that meeting, and if approved, that will allow Clear Leisure to put out its own 2014 accounts in a "timely manner".
Clear Leisure's shares resumed trading last month having been suspended back in June 2014. The investor in the leisure and real estate sectors, mainly in Italy, had requested that its stock be suspended because it wasn't able to publish its final accounts for calendar 2013 by the deadline of June 30. It had been unable to complete an audit of its Italian assets because it couldn't get hold of all the necessary information.
It finally completed an audit back in October and last month reported a EUR7.3 million pretax loss for 2013, compared with a EUR2.4 million pretax loss in 2012. It also published its results for the first half of 2014, revealing it swung to a pretax loss of EUR395,000, compared with a EUR451,000 pretax profit in the corresponding period last year. It was hit hard by the unforeseen closing and subsequent write-down of tour operator and hotel management company ORH SpA at the start of 2014.
It has several other investments, including a chain of Italian sushi restaurants and a water theme park, but is grappling mainly with Mediapolis, a 165 acre tract of real estate which has been approved for the development of a major theme park, hotel, shopping complex and commercial activities.
Clear Leisure has been increasing its stake in Mediapolis, which is trying to restructure its debt.
In November 2013, the company got two bids for its then stake in Mediapolis, but the proposed deals were complicated by Mediapolis's debt structure, and in mid-January 2014 it applied to a tribunal in Italy for clearance of a debt restructuring proposal. The proposal was rejected in May on the grounds that it was uncertain a construction permit would be received in accordance with the plan.
In August, Clear Leisure said it had a letter from the Regione Piemonte confirming the rights of the building licence as well as the commercial rights owned by Mediapolis, and confirming the region's full administrative support to provide all the necessary documentation within the next 18 months.
Clear Leisure last month said it was looking forward to finding a "suitable" buyer for Mediapolis in 2015, having rejected the two offers in the first half of 2014.
Clear Leisure shares were up 26.7% at 1.14 pence in London Monday morning, making it one of the best-performing stocks in the AIM All-Share index.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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