Dolphin Capital Investors (Dolphin) has announced that it has entered into an agreement for the disposal of its 60% interest in Pearl Island, a private island development off the coast of Panama, to Grivalia Hospitality S.A. (Grivalia). Dolphin is to receive a cash consideration of €27m, before related tax and fees, which it says represents a 7% discount on the its €29m cost of investment in Pearl Island. Dolphion says that the implied transaction enterprise value of €63m represents a 32% discount to DCI’s gross asset carrying value as at 30 June 2016 and will result in a loss on sale of €27 million.
Dolphin says that Grivalia will purchase its entire 60% stake in Pearl Island and all entities related with the project currently owned by Dolphin and its subsidiaries. Completion of the Disposal is conditional on 1) the completion of a corporate restructuring in Pearl Island to enable the Grivalia to own shares directly in the asset owning Panamanian subsidiaries; and 2) the consent of Ritz Carlton (the project’s hotel operator and a subsidiary of Marriott International, Inc.) and Banistmo S.A. (the project’s senior lender) to the change of control and certain other conditions relating to the modification of certain terms of the hotel management agreement. Dolphin says that it expects that these conditions will be met, or waived by Grivalia, by 31 March 2017.
Dolphin says that the Disposal is in line with its Board’s decision to accelerate asset divestments, improve liquidity and return capital to shareholders, following approval of the new asset strategy by shareholders on 19 December 2016. It also follows the recent announcements of the Group’s sale of its interest in Aristo Developers Limited, based in Cyprus, and the sale of its Playa Grande Golf and Resort project in the Dominican Republic.
Of the total €27 million cash consideration, Dolphin says that €1m has been already paid by the Acquirer in the form of a non-returnable deposit, €24m will be paid upon completion of the sale and the balance of €2m will be retained in an escrow account for a period of 12 months post completion to cover any potential breach of Dolphin’s warranties or undisclosed indebtedness. Dolphin says that, following completion, its Board will make a further announcement on the application of the Disposal proceeds.
Dolphin Capital Investors disposes of interest in Pearl Island : DCI