Friday, May 30 14:00:22
Cyprus's Ermes Department Stores, CTC-ARI, has agreed to dispose of its 50pc stake in a consortuim running airport retail outlets to Aer Rianta International (ARI) for E55.7 million.
The Irish company, a subsidiary of Dublin Airport Authority, said the investment demonstrated its commitment to growth in the Middle East region.
Ermes has had to contend with three years of economic recession in Cyprus and the deal with ARI will allow it to focus on its main business of operating Debenhams department stores on the Mediterranean island, along with other retail outlets including Next.
The company said its participation in the airports business had "matured", suggesting that it sees no further room for growth, and that it intends to use proceeds from the sale to invest in new business opportunities. It gave no indication on the type of investments envisaged.
Ermes said the deal, which is subject to regulatory approval, would have a significant positive impact on group profitability for 2014 and, by extension, for its holding company the Cyprus Trading Corporation.
Aer Rianta, a subsidiary of the Dublin Airport Authority, and Ermes had an equal shareholding in the CTC-ARI (Holdings) consortium administering retail space at Cyrpus's Larnaca and Paphos airports in a concession that ends in 2031.
CTC-ARI generated turnover of €88 million in the year to the end of December 2013.
The business operates close to 5,000 sq. metres of retail space, and employs 375 people directly, across both airports.
ARI said the acquisition will be earnings accretive for DAA Group from completion.
"We are extremely pleased to have the opportunity to add substantially to our shareholding in this valued concession in Cyprus, which will contribute immediately to ARI's profits," said ARI chief executive Jack MacGowan.