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Mon 4 Jan 2016 10:14 AM

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Arab-backed fund signs $434m deal to buy luxury Greek resort

Fund representing investors from the UAE and Kuwait has bought the Astir Palace hotel complex

Arab-backed fund signs $434m deal to buy luxury Greek resort

Greece's privatisation agency said on Sunday it signed a 400 million euro ($434.3 million) deal with Jermyn Street Real Estate Fund to sell Astir Palace, a luxury seaside resort outside Athens.

Greece's top administrative court had blocked the sale of the Astir Palace hotel complex in March, saying the town planning scheme that Greece submitted violated Greek law as the construction of a large number of residential buildings would harm the natural and urban environment.

"Jermyn Street Real Estate Fund has signed the new agreement to submit the amended special zoning and spatial plan for the development of Astir Palace," the Hellenic Republic Asset Development Fund (HRADF) said.

The fund represents investors from Turkey, Abu Dhabi, Dubai, Kuwait and other Emirates.

The agency said the agreement ensured that the fund's development plan for the resort was adjusted to the court's opinion.

"The whole process is expected to be completed within the first half of 2016," HRADF said.

The agency is expected to cash in about 100 million euros from the deal. The rest of the proceeds will go to National Bank, Greece's largest lender, which owns about 85 percent of the resort.

Privatisations have been a key condition of Greece's international bailouts since 2010 but its state asset sales scheme has produced poor revenues due to bureaucratic delays and lack of political will.

So far, Athens has raised only about 3.5 billion euros from state asset sales versus an original target of 50 billion euros.

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