Gasan Finance Company plc, part of the Gasan Group of Companies, yesterday officially announced a €15 million six per cent bond issue.
The issue may be increased by €5 million to a total of €20 million in case of over-subscription. The bond is redeemable between 2014 and 2016.
Proceeds from the bond, which net of commissions and expenses are expected to amount to €14.55 million (€19.5 million in case the over-allotment option is exercised) will be used to redeem the outstanding principal amount of the 6.4 per cent 2008-2011 bond issue which currently amounts to €10.89 million.
The company said the new bond issue will also be used for general funding, to refinance part of the group companies' debt, or to be lent to them.
Preference will be given to existing bond holders who were on the register on April 1. They will be entitled up to their full amount rounded to €1,000 if the bonds 2008/11 held are less than €1,000 or to the nearest multiple of €100 if the bonds held are more than €1,000.
Preference will also be given to applications for the bonds made by employees of Gasan Group, excluding their spouses and dependants.
The bonds, with a nominal value of €100 each, will be issued at par. Interest is payable semi-annually.
Applications may be made for a minimum of €1,000.
Applications open on April 27 and close on April 30 or earlier.
Group chairman Joe Gasan earlier this month told The Times Business that draft accounts for 2008 showed similar results to 2007, when the group registered an operating profit of €6.4 million.
The automotive franchises for Jaguar, Mazda, Volvo and Ford continue to be the group's cornerstone operation. In February and March alone, 15 high specification Jaguars were sold, compared to the 30 sold throughout 2008.
The group is slowly venturing into Libya in conjunction with Malta-registered Austrian holding company Vaos and has established three franchises for Mazda, Volvo and Chinese marque Chery in Tripoli.
With the Fenech family's Tumas Group, the group is currently involved in the development of the 18,000-square metre Ta' Monita residential project in Marsascala. In another joint venture, the groups have acquired a 10-tumolo stretch of land adjacent to the Gasan Centre in Mrieħel to develop a dedicated business block.