Melita Finance plc, the finance arm of Melite Retail Group, on Friday announced that it has approved the buyback and delisting of its €9,250,000 secured bond issue.

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

This decision comes after some challenging years following the COVID-19 pandemic for Melite Retail Group. 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.

In its latest announcement, Melite Finance stated that as per a meeting on Friday, the Board of Directors agreed to have the bonds delisted from the Official List of the Malta Stock Exchange.

However, the submission of an application for this is subject to the company receiving the necessary approvals from bondholders.

This will be decided through a bondholders’ meeting that will be held on 23rd July 2024 at 2pm at AX The Victoria Hotel, Sliema. The necessary notice convening the meeting, text of the resolution, and explanatory memorandum setting out the reasons for the application are in the process of being dispatched to bondholders.

Therefore, the proposed buyback and delisting of the bonds is subject to Melite Finance receiving the necessary approval from the bondholders and the Malta Financial Services Authority (MFSA) in accordance with Capital Markets Rules.

It is also subject to the company receiving acceptances for the buyback by bondholders holding in aggregate at least 95 per cent of the nominal value of the bonds in issue.

The buyback shall be offered to all bondholders alike at a price of €100 per bond, inclusive of the redemption price for the bonds and all interest which will have accrued as at the effective date of the buyback.

Eligible bondholders who are interested in participating in the buyback will have until 8th August 2024 to return an acceptance form that will be provided to them on 26th July 2024.

Those who submit the acceptance form will receive the payment for the bonds acquired by the company on 22nd August 2024.

In a bid to facilitate the process, on 10th June 2024 the company also filed a request to the Malta Stock Exchange and the MFSA to have trading in the bonds be suspended until the bonds are delisted. This was approved by the Malta Stock Exchange and the MFSA.

Melite Finance stated that a further announcement regarding the outcome of the bondholders’ meeting and an update on the delisting shall be issued once the meeting is concluded.