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Louis: Measures to deal with crisis

17/10/2011 07:02
Louis decided to turn to measures including – among others – the disposal of assets, the reduction of the staff and the restriction of borrowing.

The biggest tourist company of Cyprus is in a reorganization phase lately, trying to deal with the difficulties in the main sectors of its activities and the challenges from the high borrowing and the loss-making course of the past years.

For the first time, the company reveals the ways that it tries to restrict the negative conditions in the markets.

“The signs of the times impose a measure taking by all”, Investors’ Relations Manager, Costas Hadjimarcos told StockWatch.

“”We are taking effective measures that will make us even stronger in dealing with the “storms” that we all experience”, he said.

The reorganization of Louis was under the professional guidance of PWC of Miami, specialized in the cruise sector.

On the basis of the plan prepared by the tourist company, they attempt to reduce the office space and the manpower where necessary.

“With the reduction in the number of employees at our Head Office and the management of the fleet of Louis Cruises to be carried out by Louis Building in Piraeus, we need far less space to house the company in Cyprus”.

“Also, Louis Hotels has a suitable office at the Hilton Park Hotel in Nicosia, without having to pay rent”, he added.

Part of the reorganization includes the termination of the termination of the lease of the Louis Head Office, a move that gave rise to various rumours in the market.

Mr. Hadjimarcos answered: “It was considered reasonable to terminate the lease of this building belonging to the major shareholder of the Group, Mr. Costakis Loizou, thereby saving a significant amount annually. We understand that Mr. Loizou is examining various options for the use of the property, namely its rental or sale. "

As for the sale of ships, the representative emphasized the program for the fleet renewal announced in the past few years, which "was carried out largely by purchasing new cruise ships of new generation such as Louis Cristal and Louis Majesty”.

“Cruise ships of older generation, which served Louis Cruises for many years, such as Emerald and Sapphire, for example, are not included in the company's plans for the upcoming season and therefore they are available for charter or sale”, he stressed.

The efforts to reduce borrowing, which exceeds €0.5 billion, include the examination of the possible sale of certain hotel units, maintaining their management.

“Louis Hotels is considering following the international trend in all the hotel chains. Specifically, it will focus on management rather than the ownership of units, selling some properties but keeping their management. This strategy serves two purposes, since it reduces borrowing on the one hand and does not affect the revenues and the operation of the company on the other”, he noted.

“Those thoughts concern only two or three properties from all 19 hotel units in Greece and Cyprus and in any case Louis Hotels will evaluate any offers from interested buyers, securing its interests. We will mention only one case of property, that of St. Elias in Protaras, where the unit is inactive since 2007. Therefore, its potential sale as a property in a privileged tourist area of Cyprus serves perfectly the aims and interests of the company”, he said.

Mr. Hadjimarcos did not omit to comment on the Company’s relations with its creditors, stressing that they are excellent. He admitted, however, the banks have restricted lending due to the crisis.

"The banks in Europe and Cyprus are not an exception; they have reduced significantly the new lending either for development projects or for the provision of working capital, both to existing customers and new businesses. This creates problems and tensions in all sectors of activities, something that all businesses experience”, he said.

"Therefore, the bankers of the Group welcomed the measures that the company takes, both in terms of reducing debt and facing the crisis by reducing costs, the flexibility of the company after the reorganization and the consolidation course that all companies must follow”, he concluded.