Global Capital chasing banking, property ambitions
Investment, insurance and property group Global Capital plc is committed to venture into banking despite negotiations over the acquisition of Mediterranean Bank falling through in August. "The transaction did not happen," chief executive officer...
Investment, insurance and property group Global Capital plc is committed to venture into banking despite negotiations over the acquisition of Mediterranean Bank falling through in August.
"The transaction did not happen," chief executive officer Nicholas Portelli explains.
"Negotiations with a bank require a complex due diligence and Global Capital went through an interesting process. We spent a year researching the transaction and appointed our deputy chairman Muni Krishna T. Reddy, an experienced banker overseas, to spearhead the project. Mediterranean Bank was a project we came across. That this opportunity is no longer on the table simply means we are carrying on with the process, using the work we have carried out over the months.
"Our options are open and we are confident that in the near future, we will be able to make an announcement on which route the company has selected. We have a long-term vision for the group and we are convinced that banking is the right strategy for us."
Global Capital reported a half-year loss of €4.3 million (€905,939 -corresponding period 2007) as at June 30. Excluding fair valuations, revaluations, tax and impairment charges, the net loss was €1.5 million for the first half of 2008.
Mr Portelli points out that Global Capital's portfolio to date is down by just under 10 per cent despite the upheaval on the international markets. The cushioned 'hit', Mr Portelli says, is the result of Global Capital's strategy of moving a substantial part of its holdings into cash, short dated bonds and Treasury Bills. The life company also benefitted from this investment strategy, as a result of the merger with the investment arm in 2003.
"The climate is what it is," Mr Portelli says. "The lion's share of our reported losses are paper losses: our investments are marked to market and obviously they suffered a fall in value across the board. However, we are long-term investors: 60 per cent of our portfolio is in bonds, government stocks, cash and leased property. Fifteen months ago, we turned defensive and started to liquidate some of our investments. Any new cash coming in was retained as such or invested in treasury bills and bonds in anticipation of what is happening now. We can weather the storm and restructure our portfolios accordingly to be in a position to take advantage of an eventual upturn."
Mr Portelli attributes Global Capital's solidity in this age of financial anxiety to its foresight to diversify from its investment house origins and venture into life and health insurance, and property locally and overseas.
Mr Portelli says Global Capital has made a 150 per cent return on property sold in Dubai which was acquired four years ago. Apartments in Bulgaria and Spain are being leased at nine per cent yields, and the company is to take delivery of three apartments designed by Philippe Starck in Buenos Aires next month. Their value has risen by over 30 per cent since.
In Malta, construction has begun on a site in Madliena earmarked for luxury properties. The project, with views of Gozo, is due to come on the market in the next few weeks.
Global Capital has been granted permission to construct a commercial block on the site of the former Dun Showroom in Gzira to kickstart its wider plans for the regeneration of Testaferrata Street. Work on the site will be complete within 18 months.
The jewel in its property portfolio is the company's major shareholding in Metropolis, the three-tower avant-garde residential and commercial project, which has not lost its sparkle despite its progress stunted by a string of bureaucratic hitches.
Since receiving an outline development permit and a full development permit for demolition and excavation, the first phase of the project has been completed. The site has been granted Special Designated Area status which allows foreign buyers to acquire several properties within the project.
"At this moment in time the area needs investment and we are ready to invest," Mr Portelli points out. "We have been informed that the full development permit is in its final stages. The company is at an advanced stage with the preparations for the construction phase of the project which is expected to start next year."
Metropolis' South Tower was sold within 24 hours of going on sale a few months back. Buyers were mostly Maltese.
"Our vision is for this area to be the most desirable address in Malta," Mr Portelli says. "Global Capital has acquired most of lower Testaferrata Street. Because of the timing and the scale of the project, the regeneration of that area will be complete before Metropolis. We can envisage what this area will look like in five years' time. That is why we are confident the entire project will be a success. We are just waiting for the final green light to make it a reality."
"The transaction did not happen," chief executive officer Nicholas Portelli explains.
"Negotiations with a bank require a complex due diligence and Global Capital went through an interesting process. We spent a year researching the transaction and appointed our deputy chairman Muni Krishna T. Reddy, an experienced banker overseas, to spearhead the project. Mediterranean Bank was a project we came across. That this opportunity is no longer on the table simply means we are carrying on with the process, using the work we have carried out over the months.
"Our options are open and we are confident that in the near future, we will be able to make an announcement on which route the company has selected. We have a long-term vision for the group and we are convinced that banking is the right strategy for us."
Global Capital reported a half-year loss of €4.3 million (€905,939 -corresponding period 2007) as at June 30. Excluding fair valuations, revaluations, tax and impairment charges, the net loss was €1.5 million for the first half of 2008.
Mr Portelli points out that Global Capital's portfolio to date is down by just under 10 per cent despite the upheaval on the international markets. The cushioned 'hit', Mr Portelli says, is the result of Global Capital's strategy of moving a substantial part of its holdings into cash, short dated bonds and Treasury Bills. The life company also benefitted from this investment strategy, as a result of the merger with the investment arm in 2003.
"The climate is what it is," Mr Portelli says. "The lion's share of our reported losses are paper losses: our investments are marked to market and obviously they suffered a fall in value across the board. However, we are long-term investors: 60 per cent of our portfolio is in bonds, government stocks, cash and leased property. Fifteen months ago, we turned defensive and started to liquidate some of our investments. Any new cash coming in was retained as such or invested in treasury bills and bonds in anticipation of what is happening now. We can weather the storm and restructure our portfolios accordingly to be in a position to take advantage of an eventual upturn."
Mr Portelli attributes Global Capital's solidity in this age of financial anxiety to its foresight to diversify from its investment house origins and venture into life and health insurance, and property locally and overseas.
Mr Portelli says Global Capital has made a 150 per cent return on property sold in Dubai which was acquired four years ago. Apartments in Bulgaria and Spain are being leased at nine per cent yields, and the company is to take delivery of three apartments designed by Philippe Starck in Buenos Aires next month. Their value has risen by over 30 per cent since.
In Malta, construction has begun on a site in Madliena earmarked for luxury properties. The project, with views of Gozo, is due to come on the market in the next few weeks.
Global Capital has been granted permission to construct a commercial block on the site of the former Dun Showroom in Gzira to kickstart its wider plans for the regeneration of Testaferrata Street. Work on the site will be complete within 18 months.
The jewel in its property portfolio is the company's major shareholding in Metropolis, the three-tower avant-garde residential and commercial project, which has not lost its sparkle despite its progress stunted by a string of bureaucratic hitches.
Since receiving an outline development permit and a full development permit for demolition and excavation, the first phase of the project has been completed. The site has been granted Special Designated Area status which allows foreign buyers to acquire several properties within the project.
"At this moment in time the area needs investment and we are ready to invest," Mr Portelli points out. "We have been informed that the full development permit is in its final stages. The company is at an advanced stage with the preparations for the construction phase of the project which is expected to start next year."
Metropolis' South Tower was sold within 24 hours of going on sale a few months back. Buyers were mostly Maltese.
"Our vision is for this area to be the most desirable address in Malta," Mr Portelli says. "Global Capital has acquired most of lower Testaferrata Street. Because of the timing and the scale of the project, the regeneration of that area will be complete before Metropolis. We can envisage what this area will look like in five years' time. That is why we are confident the entire project will be a success. We are just waiting for the final green light to make it a reality."