Mediterranean Investments Holding plc - Details of New Bond Issue

On 16 June 2010 Mediterranean Investments Holding plc announced a new €30 million bond issue available in EUR, USD and GBP. The Bonds carry a coupon of 7.15% per annum in each of the currencies and the Company reserves the right to increase the amount up to a further €10 million equivalent in the event of over-subscription. The bonds have a final maturity date of 23 July 2017 but may be redeemed early on any date between 23 July 2015 and 22 July 2017.

Coupon:

7.15%

Amount Offered:

A combined aggregate amount of €30 million

Over-allotment Option:

A combined aggregate amount of €10 million

Issue Price:

100% (par)

Interest Payment Date:

Annually on 23 July

Maturity:

The bonds will mature at 100% (par) on 23 June 2017 but may be redeemed early on any date between and including 23 July 2015 and 22 July 2017.

Use of Proceeds:

The proceeds raised from MIH’s second bond issue in July 2008 were intended for the investment in one or more of 3 identified projects, namely i) the Tripoli Commercial and Residential Towers (now rebranded as Medina Towers); ii) The Fawar City and Marina development and iii) the Misurata Village development in close proximity of the Misurata Free Trade Zone. Despite having entered into a shareholders’ agreement with EDREICO within the stipulated 18-month period from the date of the 2008 Prospectus, Medina Tower’s development plans had not progressed sufficiently to warrant an immediate investment in an amount equivalent to the proceeds raised in the 2008 Bond Issue. At the same time, other demands were identified with increased investment costs on the Palm City Residences project. In order to accelerate the completion of the project and in doing so securing revenue generation at an earlier date as well as making use of the 2008 bond proceeds in the manner most complimentary to the existing funding requirements of MIH, the proceeds from the 2008 bond issue were forwarded to finance the completion of the Palm City project.

Therefore the proceeds from the new bond issue will be used as follows: (i) €31.25 million to finance MIH’s 25% equity contribution in the Medina Tower project. This consists of €19 million to reinstate the funds raised in 2008 which were utilised to fund the additional capital expenditure requirements of Palm City, and the requirement of an additional €12.25 million investment in Medina since during the planning stage this high-rise development has been extended to 40 floors from the previous 20 and (ii) the balance of €8.75 million will be used for general corporate funding purposes of MIH.

Security:

Unsecured

Listing:

Official List of the Malta Stock Exchange

Preferred Applicants’ Closing Date: (Bondholders of Mediterranean Investments Holding plc, International Hotel Investments plc and Corinthia Finance plc; shareholders of International Hotel Investments plc):

8 July 2010

Pre-placement Stage:

9 July 2010

General Offer Period:

12 July 2010 to 16 July 2010

Minimum Application for bonds:

Preferred Applicants: Minimum of €1,000, US$1,000 or GBP 1,000

Pre-placement: Minimum of €5,000, US$5,000 or GBP5,000

General Public: €1,000, US$1,000 and GBP 1,000

Downloads:

Mediterranean Investments Holding plc – Prospectus

Mediterranean Investments Holding plc – Information Memorandum

Mediterranean Investments Holding plc – Brochure June 2010

Mediterranean Investments Holding plc – Authorisation to Apply Form – June 2010

Publications – Article 139 – 17.06.10 – MIH Bonds available in 3 currencies

Should you be interested in obtaining a copy of our research note including our recommendation kindly send us an email on info@rizzofarrugia.com

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