KOSMAS GROUP REALIGNS BUSINESS STRATEGY

Source: KGI

February 26, 1999
The top executive of Kosmas Group International (KGI), one of the timeshare industry's pioneering developer/operators, says he is anxious to refocus the company after two years of evaluating whether to take KGI public.

Chairman Steven Kosmas, who has been in the timeshare business since 1975, says an IPO just "wasn't in the cards for KGI." He explains, "After reaching that conclusion, we decided our best strategy was to restructure the company back to its core operating resorts."

Last week, KGI signed a definitive agreement to sell six of its recently acquired timeshare resorts and related assets to Greenwich, Conn.-based Equivest Finance, Inc. (NASDAQ:EQUI). Under terms of the agreement, which is subject to completion of final due diligence, Equivest will buy three KGI resorts in St. Thomas, U.S. Virgin Islands; one in New Orleans; one in Ocean City, Md.; and one in St. Augustine, Fla. Additionally, Equivest will purchase a KGI-owned development site in Washington, D.C.

Following the sale, KGI's portfolio will be Florida-focused, with 10 developments in New Smyrna Beach, Key West and Orlando. A resort in St. Maarten also will remain within the KGI collection. The company will continue to serve more than 20,000 owners from its 11 resorts, retaining its distinction among the top 25 timeshare operators in the United States.

With three Florida resorts in active sales, Kosmas says KGI is on track to top $20 million in timeshare volume this year, with a 15 percent to 20 percent sales increase projected for 2000. "We had planned to take KGI public in late 1998 and decided rapid expansion was necessary to accomplish that," says Kosmas. "Unfortunately, the mid '98 downturn in the capital markets hampered our ability to pursue an IPO on schedule. After careful consideration of the valuations being achieved by our publicly held timeshare competitors, the KGI Board decided it was in the best interest of the company to remain private."

Kosmas says KGI is not disappointed to remain among the "independent developer" ranks. "This business wouldn't be where it is today without the independents. We're not as high profile as the public companies, but there's still a meaningful place for us in the timeshare industry."

Kosmas is optimistic about KGI's future. "We're looking forward to a growth year for sales at our Florida resorts and plan on offering new products and services to our global family of owners," he says. "Our company was one of the first to enter the timeshare business, and we plan on being a leading player in the industry for many years to come."