A €45 million bond issue by International Hotel Investment has closed early because of over-subscription.
The 5.75% issue opened on Monday and was closed on the same day since it was immediately heavily oversubscribed.
The company said it had received applications totalling €186 million, meaning that its offer was more than three times oversubscribed.
IHI announced the bond issue last month. It had said it would be redeeming its outstanding €35 million 6.25 per cent bonds at the first early redemption date of July 11, 2015.
The prospectus published by IHI also indicated that with this new issue, IHI also intends to raise up to some €9.1 million to partly finance the acquisition of Island Hotels Group Holdings plc.
On January 16, 2015, IHI surprised many investors by announcing that it had entered into a conditional agreement to acquire Island Hotels Group Holdings plc. The deal is not only related to the property in St George’s Bay but covers the entire business operations of the Island Hotels Group, which apart from 100 per cent ownership of the Bay Point hotel in St George’s Bay also includes 50 per cent of the Golden Sands resort, 50 per cent of the land in Ħal Ferħ, 100 per cent of Island Caterers Ltd as well as the 50 per cent shareholding in the company responsible for the Costa Coffee franchise in Malta and Spain.
In a statement today, IHI said more than 82% of bondholders in the bond that is being redeemed exercised their option and converted their holding into the new bond.
It said it considered this as an enormous vote of confidence and thanked all investors.
It also observed that the total value of the subscription was Malta’s largest ever for a corporate bond in real terms, and the largest ever over-subscription in relation to the size of bond being issued.
IHI owns seven Corinthia hotels in Malta, Lisbon, Budapest, Prague, Tripoli and St Petersburg, as well as a half share in the luxury Corinthia Hotel in London, besides extensive commercial and residential real estate in several of these cities.
The company will be announcing the basis of acceptance and the allocation policy by May 11.