Some €18 million in bonds by Midi Plc were bought yesterday in an "overwhelming" spree that lasted 90 minutes.
The bond issue was worth €30 million but €12 million were collected at the pre-placement stage, before applications opened. The rest was bought in a busy one-and-a-half hours. The company will now be releasing an over-allotment option of €10 million.
Midi officially launched their offer of seven per cent bonds on Tuesday last week while assuring the public that the issue was not "a panic button" but part of a larger financial plan to help raise the €199.6 million required for the completion of Tigné Point development, now half way through.
Midi chairman Albert Mizzi said that demand for the bonds was overwhelming and was exceptional even at the pre-placement stage, before applications opened to the public.
The prospectus accompanying the bond issue revealed for the first time how the Malta Environment and Planning Authority is asking the company to pay €4.6 million in fees for disposing construction waste into the sea. Midi is refusing to pay insisting the payment is time-barred but it will be up to the courts to resolve the dispute.
The prospectus also revealed that Midi has to pay an annual ground rent of over €1.1 million until 2025 after which it will increase in two stages up to a maximum of €2.2 million from 2050 onwards. Nonetheless, the consortium is benefitting from an initial reduced ground rent, which is not quantified in the prospectus.
Midi has to pay a premium of €91.7 million for the site, of which €32.1 million will be paid in kind.
The prospectus says that the government had an option of taking up 10,000,000 A shares in Midi by 2006 instead of waiting to recover the premium payable but the option was not exercised.
Construction at the Tigné and Manoel Island project started in 2000 after lengthy negotiations between the government and the developers. The development consists of 420 apartments, car spaces and retail outlets. It also includes the restoration of fortifications at Manoel Island.
Midi plc enjoys the backing of some of Malta's renowned business people including Mr Mizzi, Charles Polidano, Nazzareno Vassallo and Joe Gasan.