Sea Star Capital Plc announced that at the meeting held on October 31, 2007, the Board of Directors decided to sell 100% of its stake in the subsidiary Megabet Limited (under which the company has transferred all activities of the collective betting sector) and all subsidiaries that are actively involved in the sector of collective betting in Cyprus and abroad. The buyer will be the Cypriot company Dolipon Limited, which is of foreign interests.
The total maximum consideration for the sale of Megabet has been agreed at EUR10.0 million (CYP5.85 million) on condition that the buyers will carry out an independent financial and legal audit. The audits will be finalized in 2007 and no later than December 14, 2007, when the Company will release a more detailed announcement. Megabet (and all subsidiaries) will be transferred by December 31, 2007, when the consideration will be paid.
According to the six-month results on June 30, 2007, the net worth of the sector of collective betting in Cyprus and abroad stood at EUR5.5 million (CYP3.2 million). It has been agreed with the buyer that the total consideration to be paid to the company will be EUR10.0 million, if the independent financial and legal audits confirm the net worth of EUR5.5 million.
In case that the independent audits reduce the net worth below EUR5.5 million, the consideration will be subject to an equal drop with a minimum consideration price of EUR6.0 million. If the independent audits show a higher net worth, the consideration will not be increased more than EUR10.0 million. According to the above, the profit from the sale of Megabet is expected to reach EUR4.5 million maximum and EUR0.5 million minimum.
The Board of Directors of Sea Star believes that the participation of the company in the sector of collective betting discourages the attraction of foreign institutional investors and might be an obstacle to the development of strategic cooperation and finances in the sector of shipping investments. The activities of Megabet so far were not exceptionally profitable and in the future they would not be connected with the remaining activities of the Company.
The Board of Directors ensures that its decision for the sale of Megabet and the other subsidiaries falls within the framework of the achievement of its strategic goals, as these were formed after the expansion of its activities.
Further to the Company’s announcement dated October 10, 2007 on the aforementioned issue, the independent financial and legal audits to the ship owner companies, as well as the technical inspection in the ships, which would be finalized in October, have not been finalized yet although they have entered the final stages. The Company will issue a new announcement after the finalization of the audits.
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