AX Group on Wednesday announced that its issue of €40 million unsecured bonds has been oversubscribed, two weeks after it was first launched.
The bonds, which were initially listed on 27th September 2023, were open for offers from 5th October up until 23rd October of the same year, yet the company announced that following the oversubscription, the offer period was closed on Thursday (today) at noon.
The entirety of the proceeds of the bond issue shall be used to redeem existing bonds maturing in 2024, with the maturing bonds carrying a six per cent coupon rate. This new issue is expected to result in a decrease in the company’s financing costs for the coming years.
The new bonds were first offered to holders of the maturing bonds, up to the amount held at close of trading on 19th September 2023. The balance not subscribed was then made available to maturing bondholders wishing to increase their holding, AX Group employees and Directors, shareholders of AX Real Estate, as well as other group bondholders.
Given the oversubscription, AX Group stated that the intermediaries’ offer, scheduled for 3rd November 2023, will not take place.
AX Group’s Board of Directors thanked the holders of the securities within the group and authorised financial intermediaries for their “continued support and trust”.
AX Group is a diversified group of companies operating across multiple sectors, including construction, development, healthcare, real estate, hospitality, and renewable energy.
Over the years, the hospitality division has been seen as the main source of revenue for the group, yet this took a hit in recent years due to the COVID-19 pandemic. This was a factor in AX Group recording a €1.3 million pre-tax loss during 2022, with its hospitality wing still having its pace of recovery constrained even as restrictions by local health authorities were lifted. This was not aided by increasing staff costs, which rose by 39 per cent from the previous year.
The group's performance has improved in recent months, with it recording €16.1 million revenue in the first half of its current financial year, covering the period between 1st November 2022 and 30th April 2023. The hospitality division witnessed an upturn in performance, particularly as tourism "regained its momentum", reaching activity levels similar to those of before the pandemic.
AX Group’s assets as at the end of this month are projected to reach €466 million, a significant increase from the previous financial year’s €423 million.
The group owns and operates six hotels across Malta, with these being Odycy Hotel (Qawra), Sunny Coast Resort & Spa (Qawra), The Palace (Sliema), The Victoria Hotel (Sliema), The Saint John (Valletta) and Rosselli (Sliema). It also owns Hilltop Complex, a retirement village in Naxxar that has a nursing and care home.
Additionally, AX Group is in the process of developing a hotel and residential complex in Tal-Virtù, Rabat. The project, named “Verdala Project”, is set to be completed by the end of 2024, and will consist of a 40-room five-star hotel, together with 19 fully refurbished apartments and 87 high-end apartments spread across two blocks.
Main Image:AX Group's Business Centre in Mosta / AX Group
