Lira and euro bonds issue by IHI

International Hotel Investments plc is issuing 10-year bonds in Maltese lira and euro, equivalent to an aggregate of Lm5.2 million. Application forms will be available from local banks and licensed stockbrokers tomorrow and subscriptions will be received as from February 3.

The bond issue is the first to be announced by IHI following its flotation in April 2000. The company is Malta's foremost public hotel company, owning deluxe five-star hotels in Malta, Hungary, the Russian Federation and Portugal having a combined total inventory of 1,479 bedrooms, besides other facilities and ancillary properties in these countries.

The proceeds from the issue will be used for the partial funding of the refurbishment of the Corinthia Alfa Hotel, a 530-room hotel in central Lisbon owned by the company.

The Corinthia Alfa Hotel was acquired by IHI in 2001 and a major refurbishment project is expected to commence in February 2003, aiming for completion by the second quarter of 2004.

On completion of the project, the Corinthia Alfa Hotel will be Lisbon's largest five-star hotel. The remaining funding for the project has already been secured from Eurohyp, a German mortgage bank.

The IHI bonds may be acquired in either currency, with the Maltese lira bond carrying a fixed interest rate of 6.3 per cent per annum, and the euro bond carrying an interest rate of 6.2 per cent per annum for the first seven years and 6.8 per cent per annum in years eight to 10.

IHI has also reserved the right to increase the issue by an over-allotment equivalent to Lm4.17 million in either of Malta lira or euro.

The bond issue is being jointly under-written and managed by HSBC Bank Malta plc and Bank of Valletta plc, the first time that a corporate bond issued in Malta has been jointly under-written and managed by both of Malta's leading banks.

The sponsoring stockbroker is Wilfred Mallia of Charts Investment Management Service Limited.