On 25 May, GAP Developments plc published its 2010 financial results revealing a €6.9 million loss mainly due to a reduction of €6.6 million in the book value of the property held for development and resale following an independent architects’ valuation as commissioned by the Company. The Directors explained that sales enquiries continued to be encouraging and the 2010 marketing plan gave reasonably good results. Nonetheless, sales prospects to foreigners significantly dropped following the Government’s surprise decision to stop granting residency permits to non-EU residents. The Company hopes that a revised set of qualifying rules by the Authorities will hopefully be issued as soon as possible. During 2010 GAP received a total of €23.2 million in inflow of funds which form part of the second stage deposits in accordance with the preliminary agreements signed.
The Bond Prospectus dated 21 March 2007 stated that a Reserve Account will be created so as to cover the redemption of the bonds between 30 April 2011 and 30 April 2013. Since the inflow of funds were delayed due to the unexpected delays in the granting of the Full Development Permit and other general delays, no funds were placed in the Reserve Account and therefore the forecast of €20.1 million by the end of 2010 as shown in the Prospectus could not be reached. The signing of deeds of sale have now commenced and therefore the Reserve Account is now being credited with the agreed percentage of the proceeds from the sale of every apartment in terms of the Trust Deed with Bawag Malta Ltd.
The 2010 Annual Report also revealed that the shareholders of GAP Developments plc injected further funds amounting to €5 million in March 2011 while a further €2 million will be injected in the near future to ensure the financial sustainability of the Company.