GAP Group plc - Details of New Bond Issue

On 23 November 2020, GAP Group plc confirmed that it received regulatory approval for the issuance of €21 million secured bonds maturing between 2023 and 2025. The salient details of the new bond issue are as follows:

Coupon:

3.70%

Amount Offered:

€21 million

Issue Price:

100% (par)

Interest Payment Date:

Annually on 18 December (with the first interest payment date being 18 December 2021)

Redemption Date:

18 December 2025

Early Redemption Dates:

Any date falling between 18 December 2023 and 17 December 2025, at the sole option of the Issuer, on which the Issuer shall be entitled to prepay all or part of the principal amount of the bonds and all interests accrued up to the date of prepayment, by giving not less than thirty days’ notice.

Status & Ranking:

The bonds shall constitute the general, direct, unconditional and secured obligations of GAP Group plc and the Guarantor (namely GAP QM Limited [GQM]) and shall at all times rank pari passu without any priority or preference among themselves. Nonetheless, it is important to highlight that the general hypothec over all the assets, present and future, of the Issuer is second ranking to the same hypothec granted to holders of the bond maturing in 2022.

The Bonds shall have first priority and preference over the hypothecated immovable property, pursuant to the special hypothecs to be registered by GQM over the sites at Qawra and Mosta as well as any development thereon. In addition, the bonds are guaranteed in respect of both the interest and the principal amount due by the Guarantors in terms of the Guarantee, details of which can be found in “Annex II – The Guarantee” of the Securities Note on pages 30 to 37.

However, in the event that a second tranche of bonds for the purpose of financing the Qawra and Mosta developments is issued within 12 months, the holders of the collateral constituted in favour of holders of the second tranche of bonds will rank equally with the collateral and guarantee being constituted in favour of holders of this bond issue.

Use of Proceeds:

The net proceeds from the bond issue, estimated at approximately €20.5 million after issuance costs, are earmarked for the following purposes:

i) €15.7 million to finance the acquisition of the sites in Mosta (€11 million) and Qawra (€4.6 million);

ii) €1 million to settle capital creditor balances; and

iii) €3.8 million for excavation and development costs to be incurred during the financial year ending 31 December 2021.

Offer Period:

The Issuer has entered into a Placement Agreement with MZ Investment Services Ltd in advance of the offer period, whereby the Issuer bound itself to allocate a total amount of €11 million worth of bonds to such Financial Intermediary. The remaining balance of €10 million worth of bonds is available for subscription by ‘Existing Bondholders’ – namely holders of the 3.65% bonds maturing in 2022 and the 4.25% bonds maturing in 2023 – and the general public. The offer period will close at 14:00 hours on 15 December 2020 but the offer may be closed earlier in the event of over-subscription. Applications must be for a minimum of €2,000 (nominal) and in multiples of €1,000 (nominal) thereafter.

Listing:

Official List of the Malta Stock Exchange

Downloads:

GAP Group plc – Summary Note dated 20 November 2020

GAP Group plc – Registration Document dated 20 November 2020

GAP Group plc – Securities Note dated 20 November 2020

GAP Group plc – Financial Analysis Summary dated 20 November 2020

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 GAP Group plc dated 20 November 2020 including the ‘Risk Factors’ which are found in Section 2 of the Registration Document on pages 6 to 9, and in Section 3 of the Securities Note on pages 5 to 8. Prospective investors are urged to consult an independent financial advisor for advice prior to investing in the bonds. 

Furthermore, the new bonds are complex instruments in view of the callability feature. Accordingly, these bonds are only appropriate/suitable for investors who have the knowledge and experience to understand this complexity and the risks that are specifically associated with the complexity feature.

This webpage has been prepared based on the Prospectus dated 20 November 2020 issued by GAP 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.