LifeStar Holding plc - Restructuring Plan

On 7 September 2020, GlobalCapital plc issued a company announcement in which it provided further information about its holistic strategic review aimed at: (i) resolving various legacy issues that continue to negatively impact the company and its subsidiaries; and (ii) support the consolidation and future growth of its business. In this respect, GlobalCapital explained that it has finalised a draft high-level restructuring plan which is currently being implemented, subject to various pending formal regulatory approvals that will be required in its implementation.

The restructuring plan will involve the following actions:

1. GlobalCapital plc will merge with GlobalCapital Holdings Limited which is currently a wholly-owned subsidiary of the company. Once the merger is completed in December 2020, GlobalCapital plc will have full ownership of the shares in GlobalCapital Life Insurance Limited as well as all other assets currently held by GlobalCapital Holdings Limited.
2. Thereafter, it is expected that GlobalCapital Life Insurance Limited will submit a formal application to the Listing Authority for the admissibility to listing of its shares on the Official List of the Malta Stock Exchange during Q4 2020. The listing of its shares will be made in conjunction with an offer for sale by GlobalCapital plc of at least 25% of the shares that it holds in GlobalCapital Life Insurance Limited. As part of the application, GlobalCapital Life Insurance Limited will be required to prepare and submit to the MFSA for approval a prospectus which will cater for both the proposed IPO and an offer to the shareholders of GlobalCapital plc to exchange all of their shares in GlobalCapital plc for shares in GlobalCapital Life Insurance Limited based on an exchange ratio that is yet to be determined. GlobalCapital plc will be undertaking the exchange offer concurrently with the proposed IPO. The exchange offer will effectively provide shareholders of GlobalCapital plc the ability to invest directly in the company’s insurance business while divesting their interest in the non-insurance business lines.
3. GlobalCapital plc intends to use the net proceeds received from the partial sale of its shares in GlobalCapital Life Insurance Limited primarily for the purpose of funding the additional liquidity that will eventually be required by the company to redeem its €10 million 5% unsecured bonds that are due to mature in 2021. The restructuring plan is thus intended to improve GlobalCapital plc’s capital position and structure whilst also have a positive effect on cash flows, earnings, indebtedness (as the €10 million 5% unsecured bonds are intended to be redeemed in full using part or all of the proceeds from the sale of shares in GlobalCapital Life Insurance Limited) and trading prospects.
4. Following the redemption of the outstanding bonds, GlobalCapital plc will take all actions required in terms of the Listing Rules to de-list its shares (including obtaining the required approval from shareholders). GlobalCapital plc may also consider commencing the de-listing process prior to the redemption of the outstanding bonds but with the actual de-listing to take place post redemption.

GlobalCapital plc explained that as the restructuring plan is in the process of being implemented, there are material uncertainties on its timing and execution. Furthermore, the restructuring plan is conditional on: (i) GlobalCapital plc obtaining the approval of its shareholders in the forthcoming Annual General Meeting which is scheduled to take place remotely on Friday 9 October 2020; and (ii) a number of regulatory approvals that will need to be obtained from the MFSA, including but not limited to, the approval of the Prospectus and other approvals that are required in terms of the company’s various regulated activities. Moreover, several details of the restructuring plan and proposed IPO are still under discussion between GlobalCapital plc and its various advisors. Moreover, GlobalCapital plc will be undertaking a market sounding exercise prior to the publication of the Prospectus, and the company will only proceed with the proposed IPO of GlobalCapital Life Insurance Limited and the exchange offer if it is of the opinion that it will be able to obtain a fair price for its shares.