— Property deals in Romania, Bulgaria
Demetra Investments Public Co. Ltd. is continuing on its diversification path as it seeks to play a crucial role in the commercial, investment and private equity projects in Cyprus, according to its Chairman Stavros Evagorou.
Demetra Investments was listed on the CSE in April 2000 as an approved investment company, but in March 2005 it changed its status to diversify into investments in equities and bonds on the CSE and abroad, in non-listed companies, private equity projects, as well as land and property development in Cyprus and abroad.
Evagorou told the Financial Mirror in an exclusive interview that the new 2005-2008 strategic development plan, introduced in June 2006, foresees a gradual shift and diversification into new fields.
Equity investments in Cyprus and abroad are seen declining from 44% in June 2006 to 35% by 2008. Bonds and -fixedincome holdings are projected to increase to 15% from 8.77%, non-listed holdings will be reduced to 1% from 1.3%, and private equity projects from 0.00% in June to 15%.
Investments in land and property deals are seen rising to 20% from 5.66%, cash holdings declining to 14% from 38% at present and other investments now making up 2.19% of total assets being phased out by 2008.
Evagorou explained that the objective is to reduce the Group’s reliance on one particular sector, which will reduce risk and bring better long term results for the benefit of its shareholders.
During the last 12 months, Demetra Investments has invested CYP 7 mln in land and property projects, of which CYP 4.6 mln are in Cyprus and CYP 2.8 mln abroad, Evagorou said.
Specifically, DEM has invested CYP 3 mln in Amathusa Coastal Heights, a luxury housing project in Limassol and has purchased CYP 1.6 mln worth of property in Nicosia, Larnaca and the Famagusta area, aiming for medium-term capital appreciation.
A further CYP 1.5 mln has been invested in a project to develop apartments in the centre of Bucharest in cooperation with a Romanian developer, while CYP 1 mln have been invested through a bond/option in a Bucharest project aiming for medium term capital appreciation. DEM has also invested CYP 300,000 in a property development company active in Romania and Bulgaria.
“We are satisfied at the rate of return from our property investments, both in Cyprus and abroad,” said Evagorou.
He also revealed that DEM is studying the possibility of investing in large scale BOT projects, aimed at helping the local economy, but said in view of the complex issues involved in such huge projects, the company is extremely careful in the selection of the potential projects.
— Dividends
Evagorou said he fully understands the repeated calls from shareholders for the company to return to a dividend-paying policy through a capital reduction plan, which will allow it to declare dividends from new profits, but said the board of directors is studying all legal, accounting and tax aspects before deciding how and when to reduce capital and if such a course of action would be in the best interests of shareholders.
DEM is presently the sixth-largest company on the CSE with a market capitalisation of CYP 58.6 mln.
Evagorou, who since taking office during the recent shake-up of the company has produce a major turnaround and a surge in profits mainly due to the rebound in share prices, promised to continue the drive to diversify and reduce the reliance on one sector to generate profits as the company continues on its policy of investment in new areas.
He also denied rumours that Demetra is unable to tap into its CYP 30-33 mln cash holdings, which are believed to be held with the various Coops, adding that the balances do not represent a major portion of any Coop where such funds are deposited, hence a possible withdrawal will not affect their liquidity.
“Our capital is free to be invested and will be done so according to the strategic development plan.”
Referring to the recent wave of mergers and acquisitions, Evagorou described the phenomenon as “part of the game” and said provided they are done according to the laws and do not endanger the Competition Commission’s regulations, then they are most welcome.
