Melite Finance plc, the finance arm of Melite Retail Group, on Tuesday announced that bondholders have approved the buyback and delisting of its €9,250,000 secured bond issue.

The bonds, which have a nominal value of €100 each, bear an interest rate of 4.85 per cent and are redeemable on 23rd November 2028.

This comes after Melite Retail Group encountered some challenging years following the COVID-19 pandemic. Earlier this year, its Italian subsidiary, Melite Properties Srl, terminated lease agreements with Giadea Srl, a third-party tenant which did not settle rent payments for January 2024 for the 10 stores it leased from Melite Properties.

Melite Finance had said that the Italian subsidiary sent multiple requests to Giadea for payment, yet this was to no avail, and Giadea “abusively retained occupancy of the stores in question.”

Melite Properties holds lease and rental agreements in some of Italy’s most prominent retail areas. It has a property portfolio that has been built up over a 16-year period. Melite Retail was formed in 2015, operating a number of fashion franchises in mainland Europe, including Accessorize, Calvin Klein Underwear, and 3INA Cosmetics brands across Italy. Melite Finance is a Maltese company listed on the Malta Stock Exchange.

Last month, Melite Finance confirmed that it has terminated the lease agreements with Giadea Srl in relation to 10 of the 18 stores in northern Italy. Additionally, it entered into an agreement with Accessorize Brands Ltd (ABL) and some of its related companies that will see it take over the leases to the majority of the stores previously leased by Melite Properties to Giadea.

In addition to this, Melite Finance’s Board of Directors also met with shareholders in April to request financial support for Melite Finance and Melite Properties. The shareholders, namely Alf. Mizzi & Sons Ltd, Daystar Holdings Ltd, MMGH Ltd, Andrew Ganado Ltd, and GAN Ltd, resolved to provide the much-needed support following an Extraordinary General Meeting.

Part of the agreement reached with Alf. Mizzi & Sons Ltd involved lending Melite Finance the amount required to make an offer in the market to repurchase the outstanding bonds in issue for eventual cancellation.

Following this, Melite Finance’s Board of Directors had a meeting and agreed to have the bonds delisted from the Official List of the Malta Stock Exchange.

Despite this, the decision was subject to the company receiving the necessary approvals from bondholders.

In its latest announcement, Melite Finance stated that following a bondholders’ meeting on Tuesday, all resolutions were granted approval.

The discontinuation of listing of the bonds was unanimously approved by all bondholders represented in the meeting. As a result, an application has been submitted to the Malta Financial Services Authority (MFSA) for the bonds to be taken off the Official List of the Malta Stock Exchange with effect from 22nd August 2024.

The company will thus proceed to invite bondholders appearing on the company’s register as at 24th July 2024 to accept the buyback offer which is expected to run from 29th July 2024 at 9am to 8th August 2024 at 5pm, both days included. The bonds will be priced at €100 each.

On 26th July 2024, an acceptance form and an explanatory covering letter related to the buyback process will be given to all eligible bondholders. Bondholders have until 8th August 2024 to return the form.

Payment for the bonds acquired by the company will be received on 22nd August 2024.

Additionally, Melite Finance also announced that trading in the bonds has been suspended. This means that bondholders will not be able to dispose of their bonds throughout the period during which the suspension remains in effect, including the buyback period.

“Further announcements relative to the buyback process and discontinuation of listing of the bonds shall be issued in due course,” Melite Finance stated.