CF Estates Finance plc, the financing company of CF Estates Ltd in which real estate magnate Joseph Portelli is a majority shareholder, has announced the issue of €30 million five per cent secured bonds in a bid to refinance bank loans.
The bonds will be issued at a nominal value of €100 per bond issued at par and will be redeemable at the redemption value.
The proceeds from the issue will be used by CF Estates Finance to provide a loan facility to CF Estates, which will bear interest at six per cent per annum payable on 2nd January of each year, with the principal amount to be repaid by 2nd January 2033.
Approximately €11.3 million of the amount raised through the loan will be used to refinance outstanding bank loans due by its subsidiaries Ratcon Ltd, Mistral Hotel Ltd and Haven Centre Ltd to BNF Bank plc and MeDirect Bank (Malta) plc respectively. These loans were originally principally utilised to finance part of the development costs, including the site acquisition costs, relating to the group’s hotels, particularly its St Julian's hotels, Levante Hotel, Scirocco Hotel, and Mistral Hotel, as well as to the CF Business Centre, also in St Julian's.
Additionally, an amount of up to €3.6 million will be used to finance the conversion of existing secured notes into bonds, while the difference from the amount used will be to finance the outstanding indebtedness under the loan agreement between CF Estates and CF Estates Finance dated 31st August 2022.
Furthermore, around €2.8 million of the funds shall be used to finance the remaining development costs of the group’s hotels, primarily the aforementioned Levante Hotel, Scirocco Hotel, and Mistral Hotel, covering both their completion and finishing.
On the other hand, €4.2 million will be used to finance part of the development costs, including some of the acquisition costs, related to the residential projects undertaken by CF Estates’s subsidiary CF Developers Ltd. These include the Mayfair residences in Attard, the Macael Apartments in Paola, the Sunrise Corner in Swatar, and also the Vermont Court in Pietà.
Lastly, approximately €8.1 million, together with any remaining funds not utilised for the previously mentioned reasons, will be used for the group’s general corporate funding purposes.
CF Estates Finance plc, in its prospectus, stated that the guarantor, CF Estates Ltd, was incorporated last June, and has therefore not yet published its first set of financial statements.
It instead presented such information pro forma, or what it would have looked like had the group already existed in its current form. The statement presented indicates that CF Estates Ltd would have registered a net loss of €1.3 million at the end of financial year 2021, despite recording €3.4 million revenue. Its total equity stood at €6.3 million.
The group’s majority shareholder is Mr Portelli, owning 30 per cent of it, while Francis Agius, Clifton Cassar, Duncan Micallef, and Stephen Falzon own 17.5 per cent each. It board of directors is composed of Mr Portelli as Chairman and Executive Director, Mr Agius as Executive Director, along with Stephen Muscat, Mario Vella, and Peter Portelli as Independent Non-Executive Directors.
