Melite Finance plc has announced that the conditions upon which its bond buyback was contingent have been met, and it will therefore be proceeding with the buyback that will eventually lead to its delisting from the Malta Stock Exchange.

The property holding firm has had a tumultuous few years, especially after its subsidiary was forced to terminate the lease of a tenant that had failed to pay rent.

Melite Finance had to ask its shareholders to step in and make good on their guarantee to bondholders, with Alf. Mizzi & Sons (AMS), holding 40.30 per cent of the firm’s issued capital, agreeing to loan the company €9.25 million.

Those funds were used to make an offer in the market to fully repurchase the outstanding bonds in issue for eventual cancellation.

The offer was conditional upon eligible bondholders holding in aggregate 95 per cent in nominal value of all bonds in issue accepting to sell all their bonds to the company.

On Tuesday (yesterday), Melite Finance plc announced that it has received acceptance from enough bondholders to surpass the minimum threshold, and will on 22nd August effect payment to buy back those bonds.

The company reminded eligible bondholders who wish to accept the offer being made by the company but are yet to submit their acceptance form that they have until 17:00 on 8th August to do so.

Any eligible bondholders who do not meet this deadline or who do not wish to participate in the buyback shall, following the discontinuation of listing of the bonds from the Official List of the Malta Stock Exchange, not be able to trade their bonds in the open market.

Trading in the bonds shall remain suspended until immediately prior to the discontinuation of listing of the bonds taking effect.

Other shareholders’ support

Melite Retail is also receiving support from shareholders Daystar Holdings Limited (7.43 per cent shareholder) and MMGH Ltd (9.7 per cent shareholder), with these two companies both offering their support in procuring the AMS loan. Daystar and MMGH will do this by providing security in the form of guarantees amounting to 7.6 per cent and 9.7 per cent respectively, of any eventual shortfall in the repayment of the loan.

Aside from this, Andrew Ganado Limited (21.65 per cent shareholder) and GAN Limited (9.11 shareholder), have both stated that they will be providing an undertaking to apply any funds receivable by them from Melite Properties in terms of existing loan agreements between them and Melite Properties. This will provide a guarantee to AMS in respect of the loan in an amount which shall not exceed such amounts actually received by the companies from Melite Properties. This would be equivalent to up to 3.6 per cent (Andrew Ganado Limited) and 1.4 per cent) GAN Limited) of the loan amount.

As a result, AMS is essentially relying on the company’s assets for the repayment of 77.7 per cent of the loan.

“The Board of Directors of the company remains focused on endeavouring to safeguard the interests of bondholders to the best extend possible, and considers the AMS loan and buyback to constitute the most viable means for securing bondholders’ interests through a return of the capital previously invested in the bonds,” Melite Finance stated.