GO delays decision on Forthnet’s rights issue

Yesterday evening, GO plc announced that in collaboration with its parent company, Emirates International Telecommunications Malta Ltd, it will be requesting Forthnet (through their joint-venture Forgendo) to postpone the decisions to be taken at today’s Extraordinary General Meeting to 13 January 2012. The EGM was called to ask shareholders to approve a number of changes to Forthnet’s share capital as well as a €30 million rights issue in line with the recently agreed €90 million debt restructuring deal.

GO stated that given the current macroeconomic environment in Greece and the adverse impact on Forthnet’s performance, it requires further evaluation of the request made by Forthnet to increase shareholders’ equity through a rights issue. GO added that in their view it is premature for the company, through Forgendo Ltd, to commit any funds to the proposed capital increase. GO also announced that it will again re-assess the situation at Forthnet and in Greece ahead of the re-scheduled EGM on 13 January 2012 and take a position whether to support or otherwise the proposed share capital increase of Forthnet.

On the local equity market, the MSE Share Index closed in negative territory for the third consecutive session with another 0.9% drop to a new 27-month low of 3,057.504 points. Today’s drop was mainly due to the 2% slide in the share price of HSBC Bank Malta plc to a new 31-month low of €2.50. Only 3,600 HSBC shares changed hands today. Yesterday HSBC Malta announced the closure of 6 of its branches.

On the other hand, Bank of Valletta plc edged minimally higher to close at the €2.491 level also on low volumes of just over 1,800 shares. BOV is scheduled to hold its Annual General Meeting tomorrow. Shareholders will be asked to approve a number of resolutions including the recommended final gross dividend of €0.08 per share and the recommended 1 for 8 bonus issue.

The only other active equity during this morning’s session was International Hotel Investments plc with a 2.2% decline in its share price back to the €0.83 level. Only one deal of 1,085 shares was executed during this morning’s session.

On the bond market, the Rizzo Farrugia MGS Index rose by a further 0.2% today to 987.099 points as Eurozone yields dropped back to 1.92% as uncertainty over a possible solution to the prevailing Eurozone crisis dampens investor sentiment. The longest-dated MGS, i.e. the 5.2% MGS 2031, traded up to an all-time high of 102.80% on strong volumes of over €1.2 million (nominal).