LEISURE company Minoan Group yesterday sought to address shareholder concerns about the future of the business ahead of winning support for the sale of its travel agency arm to lender Zachary Asset Holdings.

The sale will leave Minoan as the developer of an as-yet un-started luxury resort on the Greek island of Crete that the company has been trying to get off the ground since 1991.

Despite the 27-year delay, the company sought to reassure shareholders yesterday that the project will go ahead, issuing a statement to the stock exchange in which it said its focus from now on will be “the optimisation of the value of its project in Crete for the benefit of shareholders”.

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While the business noted that the sale of its Stewart Travel business “has had an unduly negative effect on the company’s share price”, shareholders voted to approve that transaction, which was first mooted at the beginning of September.

Under the terms of the deal Zachary, which succeeded related lender Hillside International Holdings as Minoan’s creditor in July, will wipe out all but £1 million of Minoan’s £8.3m debt in exchange for taking the travel agency off its hands.

In its note to shareholders Minoan, which is run by executive chairman Christopher Egleton and managing director Duncan Wilson, said it hoped to get the Crete project under way in the near future after receiving interest both from unnamed investors and operators keen to be involved in the resort.

“The company has already entered into non-disclosure agreements with certain parties and expects to enter into a number of others as discussions and negotiations progress,” the announcement said.

“Discussions are at an early stage and, while the board remains confident that the unique nature of the project enhances its desirability and gives it substantial value, it is too early at present to comment further as to the outcome and timing of these discussions.

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“In parallel, the company is pushing ahead with technical aspects of the project to ensure they are sufficiently advanced to be ready for investor and operator input.”

The business had originally planned to create a resort with 7,000 beds but had to redraw its plans after the planning permission it received in 2007 was annulled in 2010. Having reduced the number of beds to 2,000, the company was granted planning permission for the €250 million project last year.

In its note to shareholders the company said the resort “is the only large-scale project that has been fully consented through a presidential decree, which, in the light of the ever-growing market demand for top-quality leisure accommodation in Greece, is significant and bodes well for the future of the project and its value to the company as well as to prospective investors and partners”.

Shares in the business opened 13 per cent up yesterday before falling back down in early morning trading. Despite receiving another bump after the Zachary deal won shareholder approval, they continued to fall over the course of the day before closing 8% up on the previous day’s close.

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At 3.1p the company’s shares are now trading significantly below the 99p they achieved when the company floated on the Alternative Investment Market in May 2007. Having fallen to 10p over the next two years, they have bumped along below the 20p level ever since, with the company’s current valuation being the lowest in its history.

The company said it believes it is currently “substantially” undervalued, adding that as a mark of confidence in its future directors who have not been paid “have indicated that they are willing to accept shares or options in place of a large part of their unpaid remuneration”.