Shoreline Mall plc has confirmed that a funding commitment from its ultimate parent company remains available as one of several options to repay its €14 million bond, even as it seeks bondholders' approval to extend the bond's maturity by two years.

The clarification was provided by Shoreline director Ryan Otto in response to questions from WhosWho.mt following the company's proposal to postpone repayment of its 4 per cent Secured Bonds 2026 until 1st August 2028.

The questions arose because Shoreline's latest financial statements stated that its ultimate parent company, Jade Property Investments Ltd, had committed to provide the funding required to repay the bonds should refinancing or other funding options not materialise. However, that commitment was not referred to in the company's subsequent circular to bondholders explaining the proposed restructuring.

Asked why Shoreline was not relying on that commitment instead of extending the bond, Mr Otto said the company has "multiple options in hand" and is pursuing them "sequentially in order of preference," meanwhile confirming that this financing is still available. 

Company maintains garnishee orders have disrupted refinancing

Shoreline has consistently argued that precautionary garnishee orders obtained by contractor Koray Global Malta Limited have complicated its ability to complete a refinancing of the bond.

Mr Otto reiterated that position, stating that "the abusive action by KGML has resulted in the company being unable to receive the majority of its rental payments."

He added that Shoreline Group had offered Koray a guarantee "for the full value of its claims", describing the proposed guarantee as being worth more than €44 million.

"Even though Shoreline Group has offered the claimant a guarantee for the full value of its claims, the guarantee offered [is] in excess of €44m but the claimant is refusing to accept. This is completely illogical if their real intention is to secure their claim," he said.

In its circular to bondholders, Shoreline said the garnishee orders had created a "procedural obstacle" that hindered refinancing efforts and justified seeking additional time to resolve the dispute and complete alternative funding arrangements.

Koray has publicly disputed that explanation earlier today, arguing that the figures point to one of two possible explanations: either the commercial performance of the Shoreline project has been "significantly weaker than represented", or rental income has been channelled outside the Shoreline group of companies that are subject to the garnishee order. KGML added that, if the latter were found to be the case, it could raise legal questions regarding compliance with the Maltese court's order.

It further argued that Shoreline's financial difficulties "substantially pre-date" both the legal dispute and the garnishee order, maintaining that the dispute should be viewed as a consequence of the company's financial position, rather than its cause.

KGML said it had already submitted substantially more detailed information and supporting documentation to the Malta Financial Services Authority (MFSA), which it said would determine whether any regulatory action is warranted.

Why the circular omitted the parent company commitment

Mr Otto was also asked why Shoreline's circular to bondholders made no reference to the parent company funding commitment disclosed in the financial statements.

He replied that "the commitment is outside the scope of the amendment being sought. The procedure is in line with the prospectus."

When asked whether bondholders would have the option of requiring Shoreline to first utilise the parent company commitment before approving the extension, Mr Otto said the matters open for voting "are clearly detailed in the circular to bondholders in line with the prospectus." The circular does not include a resolution requiring the company to first utilise the parent company commitment.

Under the proposal, bondholders are being asked to approve amendments to the bond terms, principally extending the redemption date from 1st August 2026 to 1st August 2028, increasing the coupon to 6.5 per cent and introducing a one-off commitment fee.