AX Group plc - Details of New Bond Issue

On 25 November 2019, AX Group plc published a formal notice in relation to the issuance of two new unsecured bonds for a total of €25 million. The Series I bond will carry a coupon of 3.25% and matures in 2026 while the Series II bond will carry a coupon of 3.75% and matures in 2029. The salient details of the new bond issues are as follows:

Coupon:

Series I: 3.25%

Series II: 3.75%

Amount Offered:

€25 million (nominal)

Issue Price:

100% (par)

Interest Payment Date/s:

Annually on 20 December (with the first interest payment date being 20 December 2020)

Redemption Date:

Series I: 20 December 2026

Series II: 20 December 2029

Status:

The Bonds constitute the general, direct, unconditional and unsecured obligations of the Issuer, and shall at all times rank pari passu, without any priority or preference among themselves and with other unsecured debt of the Issuer present and future, if any.

Allocation Policy:

An aggregate amount of €25 million in the new bonds is available for subscription by bondholders of the existing 6% unsecured bonds maturing in 2024 (Preferred Applicants).

In the event that applications from existing bondholders in any one of the Series exceed the respective intended threshold indicated in the Prospectus and there are unallocated bonds in the other Series, the Issuer shall, to the extent possible, allocate such remaining bonds to those applicants that elect to have any unallocated amount on one Series to be considered for allocation in the other Series of bonds. If following this allocation policy, the Preferred Applicants exceed the amount available for subscription, AX Group shall scale down applications accordingly.

In the event that subscriptions by existing bondholders are less than €25 million, any amount of bonds not subscribed for will be available for subscription by virtue of an ‘Intermediaries’ Offer’.

Use of Proceeds:

The net proceeds from the bond issues, estimated at €24.5 million after issuance costs, will be used for the following purposes:

i) €7 million to part finance the acquisition of land situated in ‘Tas-Sienja’, Marsa which is currently earmarked for eventual development into a mixed residential, office and commercial complex;

ii) €9 million to part finance the Group’s acquisition and development of ‘41, Merchant Street’ situated in Valletta;

iii) €4.5 million to refinance part of the Group’s existing bank borrowings;

iv) the remaining balance of €4 million will be used to finance the Group’s general corporate requirements.

In the unlikely event that the acquisition of the land in Marsa and of ‘41, Merchants Street’, Valletta are not executed, AX Group will instead utilise the €11 million in bond proceeds earmarked for such purposes to partly refinancing existing bank facilities which amounted to €8.6 million as at 31 October 2019 as well as part finance other projects in the pipeline.

Closing of Offer Period:

12 December 2019

Minimum Application:

Series I: €2,000 and in multiples of €100 thereafter

Series II: €10,000 and in multiples of €100 thereafter

Listing:

Official List of the Malta Stock Exchange

Disclaimer:

The value of investments may increase as well as decrease and past performance is not an indication of future performance. Prospective investors are urged to read the Prospectus issued by AX Group plc dated 22 November 2019 including the ‘Risk Factors’ which are found in Section 2 of the Registration Document on pages 7 to 15, and in Section 2 of the Securities Note on pages 8 to 9. Prospective investors are urged to consult an independent financial advisor for advice prior to investing in the bonds. 

Downloads:

AX Group plc – Summary Note dated 22 November 2019

AX Group plc – Registration Document dated 22 November 2019

AX Group plc – Securities Note dated 22 November 2019

AX Group plc – Bond Issue Fact Sheet

This webpage has been prepared based on the Prospectus dated 22 November 2019 issued by AX Group plc and no representations or guarantees are made by Rizzo, Farrugia & Co. (Stockbrokers) Ltd with respect to the accuracy of the data. This webpage is for information purposes only. It is NOT intended to be and should NOT be construed as an offer or solicitation to acquire or dispose of any of the securities or issues mentioned herein. Rizzo, Farrugia & Co. (Stockbrokers) Ltd accepts NO responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this webpage.

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