In what is the first bond offering issued by a Maltese company since 2003, and indeed since Malta joined the European Union, yesterday GlobalCapital issued a euro-denominated e10 million bond, carrying an over-allotment option of an additional e7 million.
Speaking at a press conference, GlobalCapital chief executive officer Nicholas Portelli explained how the issue’s proceeds will be used to reorganise the group’s inter-company borrowing, while another portion will go towards its selective overseas expansion process. He added that the group strongly believes the potential for further overseas business exists.
The lion’s share of the proceeds, however, is to be directed towards the group’s property division.
The bond, which carries a coupon rate of 5.6 per cent, matures in 2016 and is subject to an early redemption option, at the company’s discretion, in 2014 or 2015. The announcement follows a complete rebranding exercise for the group earlier this year, and the recent posting of Lm2.6 million in profits before tax for 2005.
Mr Portelli referred to the bond’s euro denomination, explaining that the choice of currency is indicative of “the clear direction the company is taking”. The euro denomination was also felt to be appropriate with Malta’s eurozone membership looming and considering the fact that some of the company’s revenue stream is derived from the eurozone.
The public offering begins today and will remain open until 26 May at the very latest, subject to the issue being over-subscribed.
Also speaking at yesterday’s launch, HSBC chief executive officer Shaun Wallis commented on how the bank was “delighted to work with GlobalCapital, which is an extremely good business” and that the bond issue will also help in the development of Malta’s capital market.
Fifty per cent of the issue is being underwritten by HSBC Malta and is being sponsored by HSBC Stockbrokers (Malta) Ltd.
Mr Wallis added: “We have been actively involved with the GlobalCapital’s bond issue, having agreed to act as sponsor through HSBC Stockbroking (Malta) Ltd as well as underwriter, manager and registrar of the bond through HSBC Bank Malta.”
Global Financial Services Group plc, the name by which the group is still officially known until its annual general meeting later this month approves the name change to GlobalCapital, has applied for the listing and trading of the bonds on the Malta Stock Exchange official list.
GlobalCapital chairman Christopher Pace said: “Today GlobalCapital offers a diverse range of services covering investment, insurance and property, all of which are positively contributing towards our results. We believe that all three divisions have an excellent potential for further growth, particularly overseas, as we recognise that the Maltese market, although offering further potential for growth, has its own limitations.
“We are looking towards growing our business both organically and through the utilisation of appropriate joint venture and acquisition strategies.
“These projects require significant investment and this issue will allow us to pursue and enter into initiatives which, no doubt, will further grow our business,” Mr Pace said.
The minimum subscription is of e2,500 or integral multiples of e100 thereafter. Copies of the prospectus are available from GlobalCapital offices and retail outlets and at all HSBC Malta branches, as well as from authorised distributors.