GTC announced that it finalized the earlier announced acquisition of a luxurious residential project and a five star hotel together with a 18-hole golf course on the Croatian cost. GTC Croatia (97% owned by GTC) holds 75% stake in the residential development with an management fee of 5% on the development costs (excluding land) and 85% stake in the hotel project. GTC expects the revenues to reach EUR100m excluding the hotel while the project is expected to be completed in 2009.
We view GTC’s entry into Croatia and in particular the hospitality business as positive given the lack of any quality accommodation and facilities there. The expected revenues of EUR100m exceed our expectation by USD30m or PLN0.5 per share.