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Probus Estates PLC (PBE)

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Wednesday 11 February, 2004

Probus Estates PLC

Trading Statement

Probus Estates PLC
11 February 2004



PROBUS ESTATES PLC

TRADING UPDATE



The Directors of Probus Estates PLC (the 'Company' or the 'Group') announce the
following update.



Casino de Mallorca



The Company has received the second non-refundable deposit of Euro 2 million
from Gran Casino Nervion S.A. with respect to the sale of Revostiney S.L. and
its subsidiaries (the 'Revostiney Group').  The Revostiney Group holds the
Group's investment in the Casino de Mallorca and land adjacent to it.



A portion of the funds paid as a deposit, which totals Euro 3 million, has been
applied to pay outstanding gaming tax.  The only outstanding condition to the
sale and purchase agreement is the approval by the local authorities of the
transfer of the gaming licence to the purchaser.  A further announcement will be
made on completion.



Probus Holding B.V. ('Probus Holding')



As a result of the sale of the Premag Holding Group ('Premag') in June 1999 and
as reported in the Group's annual reports since that time, Probus Holding, a
subsidiary of the Company, has a contingent liability to tax in the Netherlands.



In order for the liability not to crystallise, Probus Holding was required to
purchase properties similar to those held by Premag for consideration of at
least Euro 40,386,000 prior to 31 December 2003.  As reported in the Group
report and accounts for the year ended 31 December 2002, Probus Holding has
purchased properties for consideration of Euro 34,448,000 which the Directors at
the time of purchase understood would qualify to reduce the tax liability.  This
view was not confirmed with the Dutch tax authorities.



Despite the property purchases made, a tax demand has been received from the
Dutch tax authorities for Euro 7.3 million, which represents the full amount of
the contingent tax liability plus interest.  The Directors understand that the
tax authorities allege that the properties purchased were not sufficiently
similar to the Premag properties to be used to offset the tax liability.



The Group has obtained advice from its tax advisers.  The Group disputes the
demand and is in discussions with the tax authorities.  Clearly, with the
Group's significant funding issues, paying the full amount of the demand would
represent a major problem.  A further announcement will be made in due course.



In addition, the Directors are also in discussions with Munchener
Hypothekenbank, which holds mortgages on the Group's Dutch properties.  The
Group is in breach of the capital to assets covenant in the loan agreement as a
result of the reduction in value of its non-Dutch assets since the loan was
taken out with the bank.  No action is being taken by the bank at present, but
the Directors understand that the position is being held under review.  If this
position changes, a further announcement will be made.  In the meantime the net
rental income from the Dutch properties continues in line with expectations, and
is sufficient to meet both interest and loan amortisation obligations to the
bank.






                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                       

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