In June 2010, Mediterranean Investment Holdings issued a prospectus to raise “unsecured” bonds to acquire a shareholding in Medina Towers in Libya – a real estate complex. Although “unsecured”, the ownership of a real estate complex has some form of security in itself. Because of the recent civil war in Libya, the project stalled and the money is still safely deposited but earning a low interest rate.

Again because of the hostilities in Libya, another real estate complex of the company – Palm City – got into troubled waters and the company had to raise a loan of €13.2 million to meet commitments.

In view of these circumstances and in view of the fact that proceeds of the bond earmarked for the Medina Towers are still unutilised, the company is requesting an amendment to the prospectus of June 2010 to authorise it to take €8 million of the money raised from the bond to repay part of the loan raised by Palm City. No mention was made of any security or guarantee. It seems to me that the company is requesting a loan from bondholders out of the money that was given to it for other purposes without security.

I feel that this move also decreases the value of the bonds, which, thankfully, have recovered to their original value.

In the circumstances, may I suggest an amendment to section 20.5 of the prospectus. I would like to propose the addition of the following: “However, the issuer is authorised to redeem bonds if bondholders express their wish to do so by not later than August 1, 2012”.

If this amendment is accepted, the company can repay bondholders with their cash, which, according to the company, is still idle and would not be needed until about two years’ time. Interest saved by the company can then be utilised to pay interest on the loan taken out by Palm City.

Unfortunately, I am practically housebound and would be unable to attend the scheduled meeting called for June 11.

Perhaps any bondholder who agrees with my proposition can take it upon himself to move this amendment.