7% GAP Developments plc Secured 2011/2013

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GAP Developments plc - Prospectus 21st March 2007

The Company

GAP Developments plc was established in 2001 as a wholly-owned subsidiary of GAP Holdings to acquire, reconstruct and develop the Fort Cambridge Area located within Tigne Point in Sliema having an overall total area of approximately 29,225sqm. The Company was converted to a public limited liability company on 20 February 2007 and had an issued share capital of €4.65 million as at 21 March 2007.

In 2006, GAP Developments plc had been awarded the tender for the Fort Cambridge Area by the Government of Malta following a public adjudication process during which GAP Developments plc was the highest bidder. GAP Developments plc entered into a preliminary agreement on 29 December 2006.

The total acquisition cost amounted to €66.4 million and was financed through a Senior Loan of €34 million granted by BAWAG Malta Bank Limited and London Forfaiting Company Limited and a public bond issue of €35 million. The Senior Loan carries a floating rate of interest equivalent to 1.5% per annum above the floating 3-month Euribor rate. The Senior Loan agreement contains provisions that all cash flows emanating from the preliminary sale agreements of the apartments and the final deeds of sale will be deposited in an escrow account with the Senior Loan Security Trustee (BAWAG Malta Bank Limited) who shall be required to maintain a credit balance on the account to satisfy the payment obligations by GAP Developments plc accruing and maturing on each next repayment date under the Senior Loan agreement. Any balance in excess of the next repayment obligation of the Senior Loan will be released by BAWAG Malta Bank Limited in favour of GAP Developments plc.  The Malta Environment and Planning Authority (MEPA) approved the issue of a full development permit for the development of the Fort Cambridge area on 7 July 2008.

On 24 April 2009, Gap Developments plc announced that it received a capital injection by Tigne Skies Ltd (a member of Azzopardi Fisheries) of €17 million. Following this capital injection, GAP Developments plc is equally owned by GAP Holdings and Tigne Skies each holding 3,200,000 shares.

Moreover, on 29 May 2009, GAP Developments plc announced that it received further loans from GAP Holdings Ltd and Tigne Skies amounting to €1.5 million and €7 million respectively. Each of these loans is repayable by GAP Developments plc following the repayment of all existing bank loans and facilities of the Group and following the repayment of the bonds.

Use of Proceeds

The net proceeds from the bond issue enabled GAP Developments plc to co-finance the settlement of the tender for the development of the Fort Cambridge Area.

Status & Security

The Bonds were issued in fully registered form and are represented by a Global Bond for €35 million.

The Bonds are subordinated and rank below the Senior Loan. Consequently the Bond Interest ranks below and subsequent to the Senior Loan Security Interest being paid and also to any prior ranking security interest. However, the Bonds rank with priority and preference to all other present and future obligations of GAP Developments plc by virtue of the general hypothec and special hypothec over the Hypothecated Property (the Phase 1 development) which the Company has agreed to grant in favour of the Senior Lenders and the Bondholders.

As the Bond Trustee, BAWAG Malta Bank Limited shall be empowered to release individual apartments of the Hypothecated Property from the Bond Security Interest encumbering such apartment/s upon receipt from GAP Developments plc or from prospective buyers of around 20% of the total purchase consideration of the apartment sold. The funds received by BAWAG Malta Bank Limited shall be held under trust in a segregated bank account (Reserve Account) for the benefit of the bondholders with a view to meeting the redemption of the bonds at maturity.

Coupon

7.0%

Amount Issued

€34,941,085

ISIN Code

MT0000331216

Maturity

The bonds will mature at 100% (par) on 30 April 2013, but may be redeemed earlier either on 30 April 2011 or on 30 April 2012 by giving not less than 60 days notice.

Interest Payment

Annually on 30 April

XD Date

14 April

Listing

Alternative Companies List

Directors

George Muscat, Paul Attard, Adrian Muscat, Mark Castillo.

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