Most of Polly Peck's Cyprus assets sold

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The Independent Online
The administrators of Polly Peck International declared a significant victory yesterday with the sale of most of the group's businesses in northern Cyprus.

Coopers and Lybrand declined to reveal the price paid, because it is understood they are to make an announcement tomorrow on an interim dividend to Polly Peck's creditors. This will be the first payout to creditors of the former business empire of Asil Nadir, which collapsed in 1990 with debts of £1.3bn.

The interim payment, from a £200m cash pile held by a Dutch subsidiary, Polly Peck Holdings BV, is expected to be near the top end of the previously reported range of 1.2 to 1.8p in the pound.

The prospect of further payments will have been enhanced by the successful sale yesterday of most of the northern Cyprus assets.

Chris Barlow, the lead administrator at Coopers, said the sale of the assets to two Cypriot businessmen was a breakthrough. "After more than four years of continuous effort, during which time staff and advisers of Coopers and Lybrand have been threatened, imtimidated, physically attacked and indeed shot, it is with considerable satisfaction and pleasure that we are able to announce this deal today," he said.

The shares in three Polly Peck-owned intermediate companies, whose assets comprise two hotels, a cardboard box manufacturer and a fruit-processing business, were sold to Learned Ltd, a newly formed company belonging to Mehmet Civa and Elmas Guzelyurtlu.

Because of Asil Nadir's influence in northern Cyprus, access to the assets had always eluded the administrators. "Lots of people in the market felt it was impossible to make any realisation of these assets. Indeed, in our own forecasts, we never attributed a value to them," Mr Barlow said.

After so many frustrations and failures, the administrators decided on a different approach which avoided the need to gain physical access to the assets. They opted to sell the intermediate companies that owned the northern Cypriot assets to the local businessmen, effectively leaving them to sort out the problems.

The unspoken assumption is that the two men, one a banker and one a politician, will succeed with their local influence where the foreign adminstrators failed.

The Cypriot assets still owe the government some $15m in unpaid taxes and social security contributions. The two businessmen said they would begin negotiations immediately to resolve this dispute.

Coopers said court actions in Cyprus continued as there were still some assets, notably the nearly finished Crystal Cove hotel and some small properties, that remained in dispute.