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Minoan – still waiting for notice of legal clearance, short-term trading opportunity or avoid?

By Nigel Somerville | Monday 15 May 2017

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

AIM-listed wannabe holiday resort developer Minoan (MIN) has tested the patience of even the most saintly of saints for years and years. It has a plan to build a resort in northern Crete which has been going through Greek permitting and legal processes which make our own UK planning environment look as nimble as an Olympic gymnast. Of course, the misery has been about to come to an end for years, but perhaps now the green light really is imminent. Is it worth a punt?

Almost everything is in place for Minoan to start the process of cashing in on the project, with the Presidential Decree in the bag. But a fly in the ointment soon emerged after that seemingly final and critical bit of paperwork was received last year – an appeal to the Greek Supreme Court.

At the end of March it emerged in the Greek press that the appeal had been thrown out, but the company needs formal notice of this – and rather than a simple bit of paper signed by the judge arriving in the post, we are all waiting for a formal Gazette-style notice. It still hasn’t come.

This may be no great surprise after the “fast-track” application process took rather more than the few months promised – and all the other delays. But chatting to the company on 1 April at UKI it became clear that this wait was fully expected, with notice anticipated to take anything up to two months from then. So maybe, just maybe, we are in for a pleasant surprise in the next fortnight.

You can read the excellent analysis offered by the HotStockRockets team HERE which suggested a price target of at least 16p on confirmation that the appeal had been thrown out, and rating the shares a buy at up to 11p.

With the shares currently trading on a spread of 9.75 – 10.5p a return of 16p plus on a two week view looks very attractive indeed.

But that, of course, is only the reward part of the investor’s consideration: what about the risk? Will the confirmation actually come any time soon, or will we be left waiting for yet more weeks/months/years ahead?

On past form it is hard to be sure – which is why the shares are not already 16p. But if the press reports back in March  were true (and we have no reason to doubt it) then this is very much a case of a when and not an if. The issue is how long the “when” will take. How long is a piece of string?!

My company chat at UKI did make one thing clear: this is the last legal challenge so the all-clear there is the last hurdle. I’m sure there will be other bits and pieces along the way to do with building designs/permissions etc, but for the overall project the starting pistol is loaded and ready.

The uncertainty over timing might give rise to some concerns about dilution until the company can cash in. And of course some will be put off by the need for patience, with an undefined wait for that all-important court decision to be announced formally.

Given the long record of delays it is hard to offer an outright buy recommendation, even if I hold a fair chunk of this stock myself. After all the false dawns, one has to be alive to the possibility of another bout of extended hanging around.

On the other hand, if/when confirmation of court success comes it is game on. My company chat left me with an expectation of news by the end of this month and whilst there are no guarantees on timing, the company has had long enough experience to be realistic over the factors governing the release of the news I’d like to see so that I can cash-in some profits in short order.

This isn’t a trade which can be finessed. If/when the news lands – and that could happen at any time without warning - it will be too late to get in. If you believe that delivery is imminent then the shares look to be a screaming buy. If not, they are a walk-on-by.

You pays yer money……

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