7.5% Mediterranean Investments Holding plc 2015

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Mediterranean Investments Holdings plc - Prospectus 15th July 2008

The Company

Mediterranean Investments Holding plc (MIH) was incorporated as a private limited liability company on 12 December 2005 and converted to a public limited liability company on 6 November 2007. MIH is a joint-venture between Corinthia Palace Hotel Company Limited (CPHCL) and the National Real Estate Company (NREC) of Kuwait.  

Palm City Limited (99.99%)

Palm City Limited manages the Palm City Residences project through a build-operate-transfer agreement with CPHCL who holds legal title to the land on which the development is constructed. This unique development in Janzour, Libya, constructed over a plot of land measuring 171,000 square metres, is a 413 residential unit compound including residences ranging from one-bedroom apartments to four-bedroom fully-detached villas complemented by a variety of amenities and leisure facilities. The occupancy rate as at 31 December 2013 was at 95% (equivalent to 392 units) and such high occupancy levels were maintained until July 2014. In view of the renewed political conflict that emerged during the second half of 2014 in Libya and the consequent security challenges, diminished commercial activity as well as lower demand for residential premises, occupancy dropped to 66% by the end of 2014 and continued to drop below 50% by the end of the first quarter of 2015. Furthermore, MIH expects occupancy to continue declining to around 19% by the end of this year.

The Company is involved in two other projects in Libya as detailed below. However, in the light of the prevailing situation in Libya, works on these two projects have been put on hold.

Palm Waterfront (100%)

This wholly-owned subsidiary will be primarily engaged with the development and operation of the Palm Waterfront site, measuring 50,000 square metres, located adjacent to the Palm City Residences. The new site will comprise a 164-room 5-star hotel, 259 residential units (to be offered for lease or outright sale depending on market conditions), an entertainment centre, retail outlets, car park and a marina.

The project will be initiated once the situation in Libya stabilises and the subsidiary raises the required funding (40% equity and 60% debt) to complete the development phase. This development is also dependent on obtaining the necessary planning approvals from the authorities in Libya.

Medina Tower (25%)

The Medina Tower Joint Stock Company is equally owned by Arab Union Contracting Company of Libya, Alinmaa Holding Company for Tourism & Real Estate Investments of Libya; MIH and International Hotel Investments plc. The Medina Tower joint-venture company, set up in 2010, will develop a parcel of land situated in Tripoli’s main high street and measuring 11,000 sqm into a 42-storey high-rise tower comprising a mix of residential properties as well as retail, commercial, conference facilities, spa and car park. Overall, the property will comprise a total gross floor area of circa 200,000 square metres.

The project designs of the Medina Tower are complete and all development approvals have been obtained from the relevant authorities. Furthermore, the main construction contract was signed on 5 September 2012. The financing for the first phase of the project is already in place whilst the remaining funding required will be raised through a bank loan. In this respect, the Issuer has signed a term sheet with a Libyan financial institution.

Use of Proceeds

The 7.5% 2015 bonds issued in July 2008 were intended to partly finance one or more of three acquisitions that were being considered, namely the Medina Towers, a large site in Fawar (Tripoli) and the Misurata Village.

In July 2009, MIH signed a shareholders’ agreement with the Economic Development Real Estate Company of Libya for the development of the Medina Towers in Tripoli. MIH announced that it will inject €26 million for a 50% shareholding in this real estate development. The proceeds of this bond issue have therefore been utilised to this effect.

Status & Security

The bonds are unsecured and rank below the syndicated loan facility amounting to €60 million granted to a number of banks for the purposes of part-funding the Palm City Residences Project.

MIH have undertaken that for a 5-year period commencing from the financial year ending 31 December 2009 it shall build a sinking fund equivalent to 50% of the value of the both bonds to create a cash reserve from its annual surpluses to meet part of the redemption proceeds of both bonds on maturity.

Coupon

7.5%

Amount Issued

€20,000,000

ISIN Code

MT0000371220

Maturity

4 August 2015

Interest Payment

Annually on 4 August

XD Date

21 July

Listing

Official List

No. of Bondholders

1,559

Directors

Alfred Pisani (Chairman), Samuel D. Sidiqi, Joseph Fenech, Joseph Pisani, Faisal J. S. Alessa, Khadija Oubala, Mario P. Galea and Stephen Bajada (Company Secretary).

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