Private individuals made up the bulk of the 1,250 investors who took up the initial public offer of Malita Investments plc, the island’s first special purpose vehicle the government chose to acquire, develop and manage a portfolio of public immovable property.
Despite initial scepticism about this new type of investment, particularly as it was perceived as a government tool to finance the controversial Piano project in Valletta, including a new Parliament building and open theatre, stockbrokers and financial commentators were positively surprised by the overwhelming response.
“Given the challenging market conditions, we believe the Malita Investments plc equity issue was met with an overall good response from a healthy mix of subscribers,” said Edward Rizzo, from Rizzo Farrugia stockbrokers.
“The response clearly showed that the structure of the issue largely met investor requirements of a visible income stream in the form of dividend payments,” he said.
“We had mixed feelings about this offer due to its controversial political baggage but we were proved wrong,” a Valletta-based stockbroker said on condition of anonymity.
Malita sources said yesterday that although data was still being compiled, the offer had to be closed a day earlier due to the massive investor response.
“In effect, the level of interest generated by the share issue was such that the company, after having received applications for the initial 20 million ordinary B shares of 50c each, was in a position to issue an additional 10 million ordinary B shares, thereby raising the total number to 30 million.”
According to the sources, 60 per cent of offers were by private individual investors, the rest coming from nine institutional investors, including banks and other financial bodies such as insurance companies.
Apart from its financial implications, the initial publi offer’s success has also political ramifications. Finance Minister Tonio Fenech said the response was a vote of confidence in the government and its policies.
“We knew that this was a new concept and that people were at first sceptical about it, particularly because of the high political controversy surrounding the Piano project.
“However, the fact that most of the investors were private individuals shows that many are appreciating that we are on the right track.
“People only invest their money if they are convinced that theirs is a sound investment.”
He said the SVP could be another innovative way for the government to finance future capital projects.
While the government, which owns 80 per cent of Malita, might decide to divest another 10 per cent of its shareholding, it was also looking into the possibility of including other projects in Malita’s portfolio such as building a new campus for the Malta College of Arts, Science and Technology, Mr Fenech said.