Hili Properties plc - New Share Offering

On 26 October 2021, Hili Properties plc (“Hili Properties”) announced that the MFSA approved a Prospectus in relation to the company’s Initial Public Offering of 185,185,185 new shares at €0.27 each for a total value of €50 million. The allotment of new shares is conditional upon a minimum raise of €27 million which will represent at least 25% of the issued share capital of Hili Properties.

Hili Properties owns and manages strategic commercial real estate for long-term lease in the Baltics (Estonia, Latvia and Lithuania), Malta and Romania having a total value of more than €115 million. Its portfolio comprises dedicated business blocks and office space, grocery-anchored shopping centres, healthcare facilities, and property housing McDonald’s restaurants in key commercial districts.

Offer Price:

€0.27 per share.

Total Amount of Shares on Offer:

185,185,185 shares.

Use of Proceeds:

The net proceeds from the new shares, which are expected to be in the region of €49 million, will be utilised to finance new property acquisitions that have a high level of tenancy located in Malta, the Baltics, Romania and other developed countries such as Poland amongst others. It is anticipated that €30 million will be utilised in terms of an acquisition of property in 2022 whilst the remaining €19 million will be utilised to partially finance another property acquisition in 2023. In fact, Hili Properties is in advanced discussions to acquire properties in Poland and Lithuania as follows:

Commercial Property located in Warsaw, Poland

Hili Properties has been selected to enter into exclusive discussions for the acquisition of a strategically positioned property that hosts an international strong ‘Do-it-Yourself’ (“DIY”) retail operator. This property has been earmarked as the first property investment of Hili Properties in Poland to support its expansion strategy to more EU countries that present stable economic growth and potential.

Highlights of the property:

  • strategic location on one of the main exit arteries of Warsaw having close vicinity to residential areas and excellent access both by car and public transportation;
  • long lease duration of 9 years and additional extension options;
  • strong tenant, leader in its industry; and
  • newly reconstructed property.

Industrial Property located in Lithuania

Following an international tender process, Hili Properties has been selected and is in advanced discussions for the acquisition of a newly built industrial property in Lithuania.

Highlights of the property:

  • strategic location;
  • excellent access to key cargo routes;
  • strong international tenant;
  • indissoluble 20-year lease agreement with a single tenant 100% occupancy;
  • newly built property; and
  • value add / expansion potential.

Dividend Policy:

Hili Properties aims to distribute an annual net dividend of €0.0108 per share, representing a return of 4% on the issue price of €0.27 per share. Notwithstanding this, the company will evaluate its financial position and performance from time to time and consider whether, in the light of the prevailing economic conditions at the time, declare and pay out an interim dividend.

The first dividend payment following the completion of the IPO is expected to take place in 2023 – i.e. after the approval of the financial statements for the period ending 31 December 2022.

The extent of any dividend distribution will depend upon, amongst other factors, the profits available for distribution for the year, the Directors’ view on the prevailing market outlook, any debt servicing and repayment requirements including financial covenants and other restrictive covenants, the company’s cash flows, working capital requirements, investment opportunities, and capital expenditure requirements.

Lock-In Arrangement:

Hili Ventures Limited, which has a 99.99% shareholding interest in Hili Properties, has undertaken that, for a period of 24 months from the date that the shares are admitted to listing on the Official List of the MSE, not to transfer, sell, assign or otherwise dispose of its shareholding in the company.

Plan of Distribution:

The offer is open for subscription to all categories of investors. An amount of up to 18,518,518 shares has been reserved for allocation to Hili Ventures Group employees at a 10% discount on the issue price (equivalent to a discount of €0.027 per share). The remaining balance of 166,666,667 shares will be available for subscription by:

  • Authorised Financial Intermediaries entering into a Placement Agreement with Hili Properties;
  • Hili Ventures Group securities holders as at 22 October 2021;
  • Hili Ventures Group employees for any amounts that remain unsatisfied in terms of the new shares available at a discount; and
  • the general public.

In determining the allocation policy for ‘Preferred Applicants’ (i.e. Hili Ventures Group securities holders and Hili Ventures Group employees) and the general public, Hili Properties will seek to give preference to ‘Preferred Applicants’ whilst also ensuring that there will be a sufficiently dispersed shareholder base to facilitate an active secondary market in the shares.

Offer Period:

4 November 2021 till 26 November 2021 (or earlier in the case of oversubscription).

Minimum Subscription Amount:

4,000 shares (equivalent to €1,080) and in multiples of 100 shares thereafter.

Listing:

The shares of Hili Properties plc are expected to be admitted to the Official List of the Malta Stock Exchange on 15 December 2021 and trading is expected to commence on 16 December 2021.

Download:

Hili Properties plc – Prospectus dated 25 October 2021

Hili Properties plc – IPO Slideshow

Financial article: Hili Properties – A diversified commercial property company

Hili Properties plc – IPO Fact Sheet

Disclaimer:

Investors wishing to acquire the shares should read the Prospectus (in particular the ‘Risk Factors’ found in Section 1 of the Registration Document, and in Section 1 of the Securities Note) before making any investment decision in order to fully understand the potential risks and rewards associated with an investment in the shares. A copy of the Prospectus is available on Rizzo, Farrugia & Co. (Stockbrokers) Limited’s website. The investment in the shares may not be suitable for all investors and prospective participants are urged to consult their financial advisers as to the suitability or otherwise of acquiring the shares. The value of the investment and the income therefrom may go down as well as up and investors may lose some or all of the money invested.

This webpage has been prepared based on the Prospectus dated 25 October 2021 issued by Hili Properties 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.

This advertisement has been issued by Rizzo, Farrugia & Co. (Stockbrokers) Limited, a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta, and having its registered address at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta

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