Panceltica bosses sell 53% stake ahead of £40m loss

Twelve days after it temporarily pulled its shares from the alternative investment market, the Qatar-based group announced that it would make an operating loss of up to $59m (£40m) in the year ended 31 December 2008.

The loss was blamed on delays in a project to build 1,984 housing units for Barwa Real Estate in Qatar.

As a result of the financial problems, Paul Fraser, the founding shareholder and chief executive, will provide an interest-free loan of $5m (£3.4m) to the company and, together with co-founder Hameed Mostafawi, will relinquish 53% of shares in the company.

Barwa will boost its stake in Panceltica to 20%, and an investment company called Strategic Partner will control 26.5%.

Fraser and Mostafawi will be left with 14% each of the firm.

The company said the move did not raise any takeover issues because Barwa and Strategic Partner were not attempting to gain control of the company.

Panceltica announced that Fraser would step back from his role as chief executive for several months as he had been diagnosed with a serious medical condition. His duties will be performed by interim consultant Paul Manning.