Melite Finance plc, the finance company of Melite Retail Limited, on Friday announced that it has leased out seven of its stores in Italy to new tenants, while also terminating the agreements for two outlets in train stations.

The decision comes after last February, Melite Properties Srl, an Italian subsidiary of Melite Retail Limited, 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.

In its latest announcement, 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 said that Giadea Srl was placed in judicial liquidation from 14th March 2024.

On 7th May 2024, Melite Properties, Giadea Srl, and Accessorize Brands Ltd (ABL) and some of its related companies, entered into an agreement that will see ABL take over the leases to the majority of the stores previously leased by Melite Properties to Giadea Srl.

Additionally, the parties agreed, “amongst other things and subject to the satisfaction of certain conditions,” to ABL purchasing the stock previously held by Giadea Srl at the stores, the orderly vacation of the stores previously leased to and abusively retained by Giadea Srl, and also the return of the stores to Melite Properties Srl.

Accessorize at Milano Garibaldi station, one of the properties Melite Properties has terminated the lease agreements for / Google Images

As a result, Melite Properties is now able to sub-let the stores to ABL or a related company.

Furthermore, Melite Finance stated that on 27th May 2024, Melite Properties entered into seven lease contracts with Adena Stores Italy Srl, an Italian company controlled by ABL. Adena Stores took over, by way of sub-lease, the leaseholds to seven of the stores on 13th May 2024.

The company also stated that two of the 10 stores previously leased to Giadea Srl, located in train stations in northern Italy – namely Milano Garibaldi and Padova Stazione – as the landlord did not provide consent for the sub-leases.

Melite Properties entered into a termination agreement with the landlord, setting out the terms for an early termination of its leases for these stores. Subject to an undertaking to pay an exit fee to Melite Properties, Adena Stores will enter into relevant lease agreements directly with the landlord for the aforementioned two stores.

Melite Properties’ management is working to identify a tenant for the sub-lease of the remaining outlet, located in Turin.

“The company remains in close contact with management on the developing situation and will be providing further updates to the market in due course,” Melite Finance said.

In addition to this, the company also provided an update on the proposal to buy back and delist its €9,250,000 secured bonds.

Last April, Melite Finance’s Board of Directors met with shareholders 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.

Through Friday’s statement, Melite Finance confirmed that preparations for the launch of its offer to buy back and delist the bond issue “are underway.” It stated that further company announcements about this are expected to be published shortly.