Dci Advisors Regulatory News (DCI)

5 Apr 2007 08:38

Dolphin Capital Investors Limited05 April 2007 For immediate release 5 April 2007 Dolphin Capital Investors Limited (DCI.L) Acquisition of an 80% shareholding in Aristo Developers Plc and Public Offer to acquire the remaining shares Total investment of €245m marks the largest transaction of Dolphin to date Dolphin Capital Investors ("Dolphin"), the leading investors in the residentialresort sector in south-east Europe, is pleased to announce the acquisition of an80% shareholding in Aristo Developers Plc. Highlights • Dolphin has today announced the acquisition of an 80% shareholding in Aristo Developers Plc ("Aristo"), the largest holiday home development company in Cyprus and listed on the Cyprus Stock Exchange • Dolphin has secured a 60% shareholding from Mr. Theodoros Aristodimou, the principal shareholder and founder of Aristo, in exchange for €128.7m and a 15% interest in the Dolphin vehicle acquiring Aristo, and 20% from Aristo's second largest shareholder for €57.9m in cash • The purchase price equates to €2.15 per share, a premium of 8.5% to the last traded price • Dolphin will shortly launch a public tender offer to acquire the outstanding 20% of shares in Aristo also at a price of €2.15 per share which implies a total cash consideration of €57.9m • The total value of the equity of Aristo is therefore valued at €289m, and together with debt of €149m (as at 31 December 2006), represents an acquisition value of Aristo of €438m • Aristo owns a number of strategic assets that are complementary to Dolphin's strategy of acquiring large land sites and establishing premium branded residential resorts • Aristo is today believed to be the largest private land owner in Cyprus and the largest holiday home developer both in terms of annual turnover and number of units sold • Aristo owns three out of the twelve new preliminary licences for golf-integrated residential resorts granted by the Cypriot government and is considering applying for a fourth one • Aristo's flagship asset is Venus Rock, a 1,000 hectare site that is one of the largest sea-front residential resort development sites in Europe, and which is expected to comprise up to 3 golf courses, more than 3,000 residential units, a 5-star hotel with spa, extensive beach-front entertainment, retail and commercial facilities, marina and other sport facilities • Aristo also owns Eagle Pine, a 220 hectare site expected to become a golf integrated resort, situated a few kilometres away from Dolphin's Apollo Heights Polo Resort • Following the Aristo acquisition, Dolphin's investment commitments will total €517m and exceed the €399m net equity funds raised; given the strong Aristo cash flows (the 2006 unaudited post-tax profits were c. €24m) and the expected upward revaluation of the land bank of Aristo, Dolphin will be exploring enhancing its capital structure through the introduction of additional financial leverage. • Dolphin's acquisition of Aristo represents a significant acceleration of Dolphin's investment strategy by: - enhancing the DCI portfolio with a number of significantly advanceddevelopment projects in Cyprus and Greece, spread over an aggregate of 13million m2 of land, with a capacity to generate approximately 1.5 millionbuildable m2 equivalent to approximately 10,000 freehold residential units - creating the potential for significant NAV uplift upon revaluation and ultimately producing strong returns to DCI shareholders - enabling Dolphin to double its land bank in a single transaction,investing substantially all of its remaining capital of €250 million - generating current income largely from sales of existing residentialunits and from other operating assets - enabling Dolphin to leverage Aristo's in-depth management and development expertise for the progression of Dolphin's current projects in Greece and Cyprus - establishing Dolphin as the largest private land-owner and residential resort developer in Cyprus and cement its leadership position in the sector in Southeast Europe Miltos Kambourides, Managing Partner of DCP said: "The acquisition of AristoDevelopers marks the most important milestone to date in our investment program.We are excited to be partnering up with the founder of the company TheodorosAristodemou and integrating into the DCI portfolio a vast and attractivepipeline of significantly advanced development projects together with unrivalledtechnical know-how, serving to solidify Dolphin's leadership position in theresidential resort sector in Southeast Europe." Pierre Charalambides, Partner of DCP added: "This acquisition enables Dolphin toleapfrog in a single transaction (i) by doubling its current land-bank throughthe acquisition of over 13 million m2 of strategic land, the majority of whichis suited for the development of exclusive residential resorts and (ii) byfirmly establishing Dolphin as the leading residential resort investor in Cyprusand the rest of Southeast Europe." Contacts: Dolphin Capital Investors www.dolphincapitalinvestors.comMiltos E Kambourides - miltos@dolphincp.comPierre A Charalambides - pierre@dolphincp.com Adventis Financial PRAnnie Evangeli - aevangeli@adventis.co.uk 020 7034 4757 / 07778 507 162Chris Steele - csteele@adventis.co.uk 020 7034 4759 / 07979 604 687 Grant Thornton Corporate Finance (Nominated Adviser)Philip Secrett 020 7383 5100 Panmure Gordon (Broker)Richard Gray / Dominic Morley / Andrew Potts 020 7459 3600 OVERVIEW Dolphin Capital Investors Limited, a real estate investment company focused onthe Master-planned Residential Resort sector in Southeast Europe and managed byDolphin Capital Partners Limited ("DCP" or the "Investment Manager"), is pleasedto announce the securing of an 80% shareholding in Aristo Developers Plc ("Aristo"), the largest holiday home development company in Cyprus (the"Acquisition"). Aristo is listed on the Cyprus Stock Exchange. Dolphin has secured 60% from Theodoros Aristodimou, the principal shareholderand founder of Aristo, and related parties, in exchange for €129 million and a15% interest in the Dolphin special purpose vehicle established for the purposeof acquiring Aristo, and a further 20% from Aristo's second largest shareholderMihalakis Ioannides for €57.9 million in cash implying a price of €2.15 (CYP1.25) per share. The special purpose acquisition vehicle is a newly incorporated BVI company ("BVI Holdco") which will ultimately be owned 85% by Dolphin and 15% by TA. As a consequence of DCI securing an interest in excess of 30% in the issued sharecapital of Aristo, DCI is required to make a public offer for the remaining 20%of Aristo at a price of €2.15 (CYP 1.25) for an aggregate consideration of €58.9million. Subject to the public offer reaching the 90% squeeze-out threshold,Aristo will be de-listed and become a private company. The Acquisition issubject to the approval of the Cyprus Stock Exchange commission and theCommission for the Protection of Competition of Cyprus. Aristo, founded in 1983, is today believed to be the largest private land ownerin Cyprus and the largest holiday home developer both in terms of annualturnover and number of units sold. With more than 13 million m2 of developmentland under ownership, over 3,000 holiday home sales over the past five years anda pipeline of approximately 10,000 residential units under planning, Aristo hasa strong presence within the real estate development sector in Southeast Europe.The Aristo group holds three out of the country's 12 new preliminary licensesfor golf-integrated residential resorts that have recently been granted by theCypriot government and is considering applying for a fourth license. Aristo's flagship asset is Venus Rock, one of the largest sea-front residentialresort development sites in Europe. It is situated on next to Aphrodite Hills(Southeast Europe's first golf-integrated residential resort) between the townsof Limassol and Paphos. The 1,000 hectare site of Venus Rock is expected to be atruly integrated destination comprising 3 golf courses, more than 3,000residential units, a 5-star hotel with spa, extensive beach-front entertainment,retail and commercial facilities, marina and other sport facilities. The fourthgolf-integrated permit relates to Eagle Pines, a 220 hectare site a fewkilometres away from DCI's Apollo Heights Polo Resort and a 15 minute drive fromVenus Rock. In addition to the golf-integrated developments described above, Aristo iscurrently involved in the development of additional large scale residentialprojects, which together represent the substantial majority of Aristo's totalland holdings. Aristo has grown significantly in recent years, and turnover and net profit grewby an annual rate of 34% and 27% respectively from 2005 to 2006. Total sales andnet profit before tax for 2006 were €137.2m and €28.8m respectively. TA's 15% shareholding in BVI Holdco is subject to a 2-year lockup period. Afterthe lock-up period, and for an additional period of two years, put and calloptions have been agreed for TA's shareholding in the Aristo. Dolphin has alsoentered into a management agreement with TA for at least two years, with anoption to renew for two more years for as long as he maintains at least twothirds of his shareholding in BVI Holdco, with incentives tied to the NAV growthof the Aristo. TA has provided Dolphin with personal warranties regarding titlesand land ownership, the book value of the Aristo's net asset position andundisclosed or contingent liabilities. Subject to the successful execution of the public offer and reaching a 90%squeeze-out threshold which will enable the compulsory acquisition of theminority shareholders under Cyprus takeover regulations, Aristo will bede-listed and become a private company. The Investment Manager and the Board of DCI believe that the consideration paid,despite being approximately at an 80% premium to the estimated 31 December 2006net book value of Aristo and at a 9% premium to the closing share price as of 4April 2007, represents a significant discount to what DCP believes Aristo's netasset value to be. The Investment Manager and the Board of DCI believe that the transaction is ofparamount strategic importance to Dolphin, and is expected to: 1. Enhance the DCI portfolio with a number of significantly advanceddevelopment projects in Cyprus and Greece, spread over an aggregate of 13million m2 of land, comprising 4 potential golf-integrated residentialdevelopments and approximately 1.5 million buildable m2 equivalent toapproximately 10,000 freehold residential units. The Investment Manager believesthat the land portfolio and pipeline, and particularly the golf integrateddevelopments, would be almost impossible for a third party to replicate due tothe lack of available large land sites in South Cyprus. 2. Create the potential for significant NAV uplift upon closing andultimately generate strong returns to DCI shareholders. When fully developed,the assets are expected to generate returns in line with Dolphin's strategy ofnot investing in projects unless they are expected to generate an IRR of atleast 25%. DCP believes that there could be additional benefits from the higherquality branding and design concept that Dolphin can bring into Aristo's largescale projects. 3. Enable Dolphin to double its land bank in a single transaction,investing substantially all of its remaining capital of €250 million, bringingits total investments to date to €368 million and total commitments to €517million. 4. Generate future profits largely from sales of existing residentialunits and from other operating assets that can create opportunities for furtherorganic growth and reinvestment. 5. Enable Dolphin to utilise Aristo's management expertise for theprogression of Dolphin's current projects in Greece and Cyprus, as well as forthe sourcing and execution of more land acquisitions in Cyprus. In addition,Aristo has an established marketing platform which can also be leveraged upon. 6. Bring in-house a number of key operational functions that would haveotherwise been outsourced, ensuring greater control over quality and costs 7. Accelerate the development of the Dolphin strategy by acquiring aportfolio of projects at an advanced development stage, a residentialdevelopment business that is expected to generate future profits, and managementexpertise to further assist in the development of Dolphin's existing projects 8. Establish Dolphin as the largest private land-owner and residentialresort developer in Cyprus and cement its leadership position in the sector inSoutheast Europe. FURTHER DETAILS Company Background Aristo is the largest holiday home development company in Cyprus and probablySoutheast Europe (www.aristodevelopers.com). Aristo was established in 1983 byMr Theodoros Aristodemou who continues to be the Aristo's Managing Director andwho was before the Acquisition the majority shareholder with approximately 60%. Aristo grew organically from a one-man, one apartment building company to thelargest private land-owner and holiday/second home developer in Cyprus. Over thepast decade, the Aristo has developed and sold approximately 4,500 residentialunits from more than 100 residential, commercial and tourism-related projectsaround Cyprus, the majority of which have been completed in the past five years.Aristo has also been a pioneering force behind investments in golf-integrateddevelopments and has developed the first two golf courses in Cyprus, the "SecretValley Golf Course" (within Venus Rock, which Aristo owns) and the "Tsada GolfCourse" (which Aristo operates) near Paphos. Aristo is believed to be today the largest private land-owner in Cyprus with atotal land ownership totalling 13 million m2. The Aristo group has receivedthree out of the twelve preliminary golf-integrated project approvals recentlygranted by the Cyprus Government and has the potential to apply for a fourth onein the medium term. Aristo also operates two out of the three existingcommercial 18-hole golf courses in Cyprus and has an approximate 15% marketshare of the Cyprus holiday home market. In addition to the golf-integrated developments, Aristo is currently involved inthe development of additional large scale projects, predominantly residentialdevelopments for overseas buyers. Aristo's top ten developments or land holdingsin Cyprus and Greece represent a substantial majority of its total land holdingsand the estimated net asset value of Aristo. Artisto's strategy of acquiring land in key locations at attractive prices todevelop holiday homes for foreign buyers is consistent and complementary to thatof Dolphin. Aristo performs in-house the functions of land acquisition, design,project management, marketing and sales. The construction is primarilycontracted to third parties. Aristo focuses mainly on the regions of Paphos and Limassol and currently hasover 70 residential developments of various sizes under construction and 150under planning on the island, operated and managed currently by an in-house teamof approximately 406 staff. Since 1999, Aristo has also established a presencein Greece with seven residential developments completed and delivered, tworesidential developments under construction and three beachside projects underplanning. Aristo's headquarters are in Paphos, Cyprus, with satellite offices principallyin Nicosia, Limassol, Athens and Moscow. It is listed on the Cyprus StockExchange with a current market capitalisation of approximately €289 million (asof April 4, 2007). Cyprus Market Environment Cyprus entered the EU on May 1st 2004 and offers one of the most competitivetaxation environments in Europe (corporate income tax at 10%). The countryfurther benefits from an excellent climate with long seasonality and is alreadya very popular 2nd home/retirement destination for British citizens. Over thepast three years demand for second homes is estimated to have increased by anaverage 15 to 20 per cent annually. Smaller mid-market residential projects with 30 to 60 houses have been quitecommon in Cyprus over the past 20 years. Those were mostly built in and aroundPaphos, a picturesque town in the Southwest corner of the island. There is only one master-planned leisure integrated residential development onthe island, Aphrodite Hills (www.aphroditehills.com), which has experiencedtremendous success. Aphrodite Hills has been developed and managed by LanitisDevelopment Ltd over 231 hectares. The development started golf courseoperations on October 1st 2002 and to date has sold over 400 villas and 200apartments. 90% of sales have been made to foreigners, of which approximately60% were to the United Kingdom. The largest other foreign markets have beenRussia, Scandinavia and Germany. The Cyprus Tourism Organization has recently prepared a new 10-year strategicplan for the tourism industry aimed at attracting wealthier tourists andresidential buyers. This involves incentives to attract private financing tobuild additional marinas and golf courses. There are currently only threecommercially operated 18-hole golf courses on the island and a further twelvegolf course developments have recently received pre-approvals from the Cyprusgovernment. To encourage investment in golf resorts, the Cyprus government hasallowed for up to 100,000 m2 of residential real estate that could be integratedwith the development of golf courses and sold as freehold, subject to developersmeeting certain investment criteria. Aristo is one of the leaders in the development of golf-integrated residentialresorts in Cyprus, having received three out of the twelve preliminarygolf-integrated project pre-approvals to date. Market positioning and sales Aristo currently owns a land portfolio of approximately 13 million m2 ofattractive land sites in Cyprus and Greece. In 2006, Aristo derivedapproximately 97% of its revenues from the development of its land holdings andsubsequent sale of residential units. Non-core assets, namely the operation ofrecreational and other leisure facilities, only accounted for approximately 3%of Aristo's revenues for the year ended 31 December 2006. Aristo sold a total of approximately 623 units in Cyprus for the year ended 31December 2006, which, as estimated by Aristo's management, corresponds to amarket share of around 11% in terms of units sold (out of 5,800 estimated totalresidential units sold in Cyprus during 2006) or a market share of approximately15% in Cyprus and 30% in Paphos in terms of total sales. Aristo targets foreign buyers, mostly northern Europeans and Russians in searchof a retirement home and, more opportunistically, wealthy Cypriots or Greeks.Historically, the client base has been 60% British, 15% Russians, 10% Cypriotsand 15% other (mainly Europeans). Aristo currently operates 25 information andsales offices in Cyprus and Russia and also co-operates with an extensivenetwork of agents and real estate professionals. Its sales team providesextensive support services and guidance relating to legal and tax issues foracquiring a property in Cyprus, as well as facilities management and re-saleservices. During 2006, 93% of sales were made to foreigners with demandanticipated to remain strong. Large-scale Real Estate Development Aristo's largest ten projects in Cyprus and Greece represent the substantialmajority of its total land holdings by size and estimated value. Thesedevelopment projects comprise ten residential communities, four of which areintended to be large upscale golf-integrated residential resorts, as furthersummarized below. Cyprus 1. Venus Rock: Land site of approximately 10 million m2, 18 km east of Paphos,one of the largest sea-front residential resort development sites in Europe,adjacent to Aphrodite Hills (Southeast Europe's first golf-integratedresidential resort experiencing large success). Venus Rock is expected to be atruly integrated destination comprising three golf courses, 3,000 residentialunits, a five-star hotel with spa, extensive beach-front entertainment, retailand commercial facilities, marina and other sport facilities. The site currently has an existing 18-hole golf course in place (Secret ValleyGolf Course) and existing zoning for 290 villas that are currently for sale andwhich are in addition to those expected to be developed as part of thegolf-integrated permits. 242 villas have already been sold to date. 2. Eagle Pine: Land site of approximately 2.2 million m2, a few kilometres awayfrom Apollo Heights Polo Resort (Dolphin's first investment in Cyprus), and a 15minutes drive from Venus Rock. Situated at the highlands, the Eagle Pine siteoverlooks the sea around the Episkopi and Acrotiri areas near Limassol. It hasreceived preliminary approval for a golf integrated resort, with a residentialdevelopment component of up to 100,000 m2. 3. Paphos centre plot: Land site of approximately 150,000 m2 in the centre ofPaphos and within walking distance from the beach-front hotel Riviera of thetown. The site falls under two high density building zones with buildingcoefficients of 80% and 60%, where the estimated residential development for thesite is anticipated to cover over 73,000 buildable m2. 4. Pissouri Panorama: Land site of 120,000 m2 in the upcoming area of Pissouri,east of Paphos, with an estimated residential development area of 20,000buildable m2. Several other land sites are within a radius of 2km of the sitethat may eventually create a large scale development program. 5. Magioko: Beach-front site of approximately 102,000 m2 situated within atourism zone a few kilometres away from Paphos International airport. The sitehas a building coefficient of 30% for tourism developments or 20% forresidential developments. The site is intended to be developed into an exclusivebeachfront residential resort with an estimated 17,000 m2 of residences. Other major sites: Aristo owns a large number of residential non-leisureintegrated developments and villas under construction which are neverthelessvery close to the beach or other leisure activities. Notable examples include: 6. Zephyros: a development of approximately 40,000 residential buildable m2spread across a 94,000 m2 land site, situated 400 meters from the beach and theMagioko site. 7. Limassol Star: a development comprising luxury beachfront properties andleisure facilities, only 10 minutes from Limassol town centre and 30 minutesfrom Nicosia and Larnaca International Airport. The development is also within aminute's walk from the Limassol Yachting Marina and enjoys the water sportfacilities offered by the neighbouring blue flag beach. Greece 10 In 1999, Aristo established its Greek operations to focus on propertydevelopment in Greece and is now actively involved in that market. Aristo hasdeveloped and marketed large blocks of flats and offices in selective areas ofAthens and has acquired attractive coastal properties in areas such asZakynthos, Syros and the western Peloponnese, where it plans to developexclusive residential developments. These include: 8. Tsilivi project: A two-phased development with an estimated 56,000 m2 ofresidential buildable expected to be sold over 80,000 m2 of land in the smallvillage of Tsilivi, approximately 4 km from the town of Zakynthos, near the areaof Planos. Efforts are being made to reclaim an additional 20,000 m2 of land. 9. Douneika project: A beachfront property of 265,000 m2 at Douneika inPeloponnese, adjacent to the Aldemar hotel. The tourism development of theproperty will take advantage of a building coefficient of 20%, allowing for thedevelopment of a hotel and c. 18,000 m2 of residential real estate. 10. Syros project: Residential development designed in Cycladic architecturestyle, 12 km from Ermoupolis on the island of Syros, spread over a 22,000 m2site, where approximately 4,500 m2 of residential real estate can be developed. Small to medium Scale Real Estate Development Aristo has additionally 60 residential projects of various sizes underconstruction, with remaining available for sale units of approximately 80,000buildable m2 spread over an estimated 274,000m2 of land. It further holds a landinventory of 2,600,000 m2 for several potential projects under planning whichare expected to be developed over the medium term. These small to medium scaledevelopments are expected to be permitted for more than 670,000 buildable m2 intotal. Almost all of these existing and potential new residential projects are locatedin strategic points of the island, by or close to the sea, easily accessible byairports and next to well-developed infrastructure. Notable examples includeGolden Beach and Riviera Beach Villas in Paphos. Other Activities Aristo also generates approximately 3% of its revenues (approximately €4 millionin 2006) from the operation of recreational/leisure facilities and othermiscellaneous travel and insurance services. The two main ones are: (S) Randi Golfers Limited: Jointly runs the Secret Valley Golf Club(Venus Rock) and Tsada Golf Club, Cyprus' first 18-hole grass course, only 20minutes from Paphos, on an elevated position of 550 metres above sea level. (S) A&A Super Aphrodite Waterpark Limited: Owner of a waterpark locatedamidst 30,000 m2 of landscaped grounds across from the hotels on the seafront ofthe tourist area. This represents the main source of revenues for Aristo'snon-core activities, attracts more that 100,000 visitors and generates a netcash profit of approximately €1 million per annum. Business Plan & Future Strategy Following this acquisition, Dolphin intends to (i) undertake a revaluation ofAristo's assets to market value (ii) further build on Aristo's success as thelargest holiday home developer in Cyprus, and (iii) retain and further improvethe efficiency of Aristo's existing key management and operations. In order tomaximise Aristo's NAV and profitability, Dolphin will have a separate approachfor Aristo's following three project categories: Leisure Integrated Residential Resort Developments Represents the majority of Aristo's land portfolio and shall include: a. Large sites suitable for the development of branded golf-integratedresidential resorts with up to 100,000 m2 of freehold residential real estateper project, namely the 3 Venus Rock projects and the Eagle Pine project. b. Smaller sites suitable for the development of more exclusive residentialdevelopments due to the site's attractiveness, views and beach access, toinclude for example the Pissouri Panorama site and Magioko. To maximise the returns on these developments and to seek to grow Aristo's NAV,Dolphin intends to engage some of the world's most renowned master-planners,architects, golf designers, operators and marketers and target the most affluentpart of the Northern European and Russian markets. Other Residential Developments Represents the remainder of Aristo's land portfolio and includes the mid-marketresidential holiday home developments Aristo is well known for. Aristo is the leading developer in the residential sector in Cyprus, having sold3,000 units over the past 5 years. The average selling prices for the yearended 31 December 2006 was approximately €270,000 per unit and the estimated netprofit margin per unit was approximately 20%. Dolphin intends to maximise the efficiency of this division and continue to sellits existing developments to generate strong cash flows and profits. Dolphinwill be cautious with this part of the business, as it is believed that thissegment of the market is becoming very competitive in Cyprus - with a potentialslowdown expected over the medium to long term - and better margins can beachieved for more upper-scale developments which are also more in line withDolphin's core strategy. Dolphin may also seek to sell developments to otherinvestors if this provides a suitable return. Other Leisure Activities This includes non-core projects such as the Super Aphrodite Waterpark in Paphos,which generated sales in the year ended 31 December 2006 of approximately €3million and is profitable, Skylark Insurance which is an insurance brokerproviding insurance for purchasers of Aristo's residential developments, andother small non-core assets. Dolphin will consider a possible disposal of some or all of these assets andreinvest the proceeds into the existing activities of Aristo. Financing and Capital Commitments Dolphin will use €245m of its cash balances to fund the indirect acquisition of85% of the shares in Aristo. As reported in its year end results, as at 28February 2007, Dolphin had committed €272m (and of that made investments of€123m) of the €399m equity funds (net of expenses) raised at the time ofDolphin's admission to AIM and subsequent secondary fundraising in October 2006.Following the acquisition of Aristo, Dolphin's committed and invested funds canbe summarised as follows: •m Committed funds Invested funds As at 28 February 2007 272 123Aristo acquisition 245 245Total 517 368 Consequently, Dolphin is almost fully invested and has committed €118m funds inexcess of the equity funds raised of €399m (net). It should be noted that thetiming of the satisfaction of these commitments is over the next couple ofyears. The acquisition of Aristo provides Dolphin with the business of an establisheddeveloper generating sales and profits from its existing developments. DCPbelieves that given the advanced stage of development of certain of Aristo'sdevelopments, an upward revaluation of the property portfolio, and cash flowsfrom existing operations, provide an opportunity to obtain additional debtfinance. As at 31 December 2006, Aristo had debt finance of €148.5m. DCPbelieves that additional debt finance can be obtained to ensure that Dolphin cansatisfactorily meet its future investment commitments. Financial Information Aristo has grown significantly in recent years with turnover and net profitgrowing by an annual rate of 29% and 38% respectively between 2005 and 2006. The table below summarizes the total number of units sold for the period2004-2006. 2004 2005 2006 Number of Units Sold 587 517 623Average Selling Price per unit (•) 173,250 190,700 266,500 Extracts of Aristo's published historical financial information for thefinancial years 2004, 2006 and 2006 is presented below. The financialinformation for the years ended 31 December 2004 and 2005 has been audited byStephanos Stephanou & Co. The unaudited financial information for the yearended 31 December 2006 has been announced on the Cyprus Stock Exchange asindicative results examined and approved by the board of Aristo. PROFIT & LOSS ACCOUNT Audited Audited Unaudited(amounts in •) 31-Dec-04 31-Dec-05 31-Dec-06 Sales 82,919,143 101,596,313 137,246,437Cost of Sales (45,528,695) (57,626,930) (79,272,457) Gross Profit 37,390,449 43,969,383 57,973,980as a % of Sales 45.1% 43.3% 42.2% Other Income 729,432 347,470 537,861Selling & Administrative Expenses (16,408,283) (19,194,295) (25,246,359) Operating Profit 21,711,597 25,122,558 33,265,482as a % of Sales 26.2% 24.7% 24.2% Profit / (Loss) from Revaluation of Assets (116,633) - -Profit from Investment Activities - 292,464 142,269Financing Income - 808,057 788,329Financing Expenses (6,576,641) (6,388,329) (8,206,042)Profit / (Loss) from sale of affiliated company (31,280) (10,337) (12,418)Profit / (Loss) from Joint Ventures 1,249,936 2,417,507 2,859,036 Earnings Before Tax 16,236,980 22,241,920 28,836,656as a % of Sales 19.6% 21.9% 21.0% Corporate Tax (3,450,948) (3,201,059) (4,584,145)Effective Tax Rate 21.3% 14.4% 15.9% Earnings After Tax 12,786,031 19,040,861 24,252,511as a % of Sales 15.4% 18.7% 17.7% Aristo's 2006 Balance Sheet has not yet been published. The 2006 Balance Sheetresults are expected to be announced by the end of April 2007. BALANCE SHEET (amounts in •) Audited Audited 31-Dec-04 31-Dec-05 Fixed Assets 136,651,115 138,340,512Intangible Assets - 152,682Investments in Joint Ventures 1,378,778 1,837,010Investments in Affiliated Companies 4,497,557 4,517,592 Total Fixed Assets 142,527,449 144,847,796 Inventory and Work in Progress 156,510,954 199,132,301Investments 310,357 379,961Debtors and Prepayments 8,887,527 8,178,286Receivables from affiliated companies 133,508 -Cash & Banks 715,318 991,073 Total Current Assets 166,557,664 208,681,622 TOTAL ASSETS 309,085,113 353,529,418 Share Capital 44,991,540 45,470,207Reserves 77,793,204 41,705,737Retained Earnings - 54,261,503Minority Interest 14,038,444 14,324,385 Shareholders' Equity 136,823,188 155,761,832 Long-Term Debt 42,949,491 72,357,831Land Creditors 9,772,414 -Deferred Taxation 9,968,337 9,862,862 Long Term Liabilities 62,690,242 82,220,694 Creditors 70,341,704 61,008,294Short-Term Debt 17,589,371 52,203,813Long term liabilities payable 19,352,756 -Amounts payable to affiliated companies - -Tax & Duties Payable 2,287,853 2,334,785 Short Term Liabilities 109,571,684 115,546,891 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 309,085,113 353,529,418 Public Offer Process Under the "Cyprus Take-Over Legislation", Dolphin intends to file a Public Offer("PO") for the remaining 20% public free-float of Aristo. The PO will be filedwithin 12 working days from the date of this announcement and shall remain openfor acceptance for a period of 30-55 days, as contained in the PO document. ThePO shall be subject to the approval of the Cyprus Stock Exchange Committee(CySEC) and the Cyprus Anti-monopoly Commission ("AMC"). Subject to the approval of the CySEC and AMC, the PO document shall be publishedand sent to all Aristo shareholders, within 7 days from such approvals. If atthe end of the PO period, DCA acquires in total 90% or more of the Aristoshares, DCA may activate the "squeeze-out" provision to acquire the rest of thefree float at the PO price, within a period of 3 months. The shareholders, whohave not accepted the PO, have the right to "sell out" their shares to DCA atthe same price, within the same period and DCA is obliged to acquire them. Once DCA completes the acquisition of 100% of Aristo's shares, Aristo shallbecome a private company and will be de-listed from the Cyprus Stock Exchange.If at the end of the PO period, DCA acquires in total less than 90% of Aristo'sshares, then Aristo shall remain a public company listed in the Cyprus StockExchange, trading under a special category, since less than 25% free float shallexist. Notes to Editors Dolphin Capital Partners DCP is an independent private equity firm founded in 2004 by Miltos Kambouridesand Pierre Charalambides after leaving Soros Real Estate Partners. The DCP professionals combine extensive local knowledge and contacts withexpertise gained at some of the world's leading financial institutions. Theyspecialise in providing capital to rigorously selected real estate developmentsin Southeast Europe by joint venturing with local developers. For everydevelopment, DCP partners with an international and sophisticated network ofoperators, designers, master-planners, marketing agents and financialinstitutions. Dolphin Capital Investors DCI has closed investments in nine projects, namely Kilada Hills Golf Resort,Scorpio Bay Resort, Apollo Heights Polo Resort, Amanmila Resort, Lavender BayGolf Resort, Sitia Bay Golf Resort, Seascape Hills Resort, Livka Bay Resort andRebranded Hotels, committing a total of €272 million in 15 months since itsAdmission to AIM in December 2005. This transaction brings Dolphin's totalinvestments to date to €368 million and total commitments to €517 million. DCI's investment objective is to provide shareholders with strong capital growthcombined with a low risk profile through investing in early-stage sophisticatedleisure-integrated residential resort developments in Southeast Europe inpartnership with leading developers and operators. This information is provided by RNS The company news service from the London Stock Exchange