Minoan excites as Greek OK nears

Chatter in the Greek media overnight suggests the authorities have discussed and approved the terms of a draft Presidential Decree in respect of Minoan's project there. Shares in the leisure resort developer have surged by almost a fifth in response, and could be worth twice as much in time.

"The Central Council for the Administration of Public Property has discussed and approved the terms of the draft Presidential Decree in respect of the Group's project in Crete, which is part of the process for the issuance of a Presidential Decree prior to evaluation by the Greek Council of State," explained the company Thursday.

Chairman Christopher Egleton said in July: "we are progressing talks over the summer with a number of third parties who have expressed an interest in participating in the project once the Presidential Decree has been granted."

We'll be told when it the official announcement has been received and translated.

Minoan took the opportunity to flag up the issue of a three-year unsecured convertible loan note up to a maximum amount of £1.5 million. The conversion price is 15.5p per share and the coupon is 10% per annum out to January 2018. "The funds will be used to provide general working capital and to support further acquisitions," says Egleton.

This is clearly progress, but Minoan shares have tripled since summer 2013. And, almost 100p when they moved to AIM from the PLUS market in May 2007, the shares have failed to break above 19p over the past five years, despite several attempts.

However, house broker WH Ireland is cautiously optimistic:

We value the Group on a sum of the parts methodology, using an implied value for the Crete Project, in combination with a FY 2015E EBITA multiple of 8.0x for the Travel business, which results in our share price target of 28p. As such, we maintain our Speculative Buy recommendation.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.