Melita Capital plc yesterday announced the issue of €25 million in seven-year bonds, paying 7.15 per cent interest.
There is an over-allotment option of a further €5 million. The bonds may be redeemed earlier at the issuer's discretion between 2014 and 2016.
Bi-annual payments to bond holders will be made in March and September. Pre-placements of up to 60 per cent of the €30 million will be accepted on September 24; €3 million are also being reserved for preferred applicants defined as directors and employees of Melita plc.
Subscriptions open on September 28 and close on October 2. The bond issue may close earlier if oversubscribed.
"Melita has a 17-year heritage of pioneering breakthroughs within the Maltese communications and home entertainment service industry, a trend we intend to continue," Melita plc chairman Joe Gasan told a press conference yesterday.
"Over the past two years, Melita has continued to experience substantial growth in subscriptions, products and services, even during a tougher economic climate. In 2007, Melita attracted €165 million for the leveraged buyout agreement, and now the shareholders have invested a further €50 million to strengthen Melita's infrastructure."
This is the first bond issue by Melita Capital plc to finance recent projects including the fibre optic submarine cable linking Malta to the rest of the world and the next generation infrastructure for mobile communications. A substantial portion of the funds will go towards financing the growth of Malta's fastest growing mobile operator - Melita Mobile - the subscriber acquisition costs and further capital expenditure to meet the demands of an increasing subscriber base. Funding will include a loan in the region of €17 to €22 million to refinance project funding and to facilitate future financing needs.
Meanwhile, €7.5 million will be loaned to Melita Infrastructure Ltd, which is 100 per cent owned by Melita Capital plc, to refinance project funding related to Melita's submarine cable. Melita Infrastructure owns the recently built submarine cable connecting Malta to Sicily, providing international bandwidth to Melita plc internet and telephony customers as well as corporate customers. Melita Investment offers a highly cash generative opportunity with excellent profit margins and generating a growing cash flow profile predominantly from Melita's internet customers.
Melita plc has just been awarded a multi-million euro contract by Dante, an EU-funded operation, to supply the University of Malta with high-quality international bandwidth linking Malta to mainland Europe and Israel, enabling the University of Malta to participate actively in Géant2, an EU-wide network.
Co-funded by the European Commission and Europe's national research and education networks, Géant2 is a high-bandwidth, academic internet network serving Europe's research and education community. The system, which is managed by the Cambridge-based Dante (Delivery of Advanced Network Technology to Europe), interconnects over 30 million researchers spanning 34 European countries and links to a number of other world regions.
"Melita is a home-grown company that is a pioneer in introducing innovative services and applications to the Maltese islands," Melita chief executive officer Stephen Wright said.
"We were the first to offer cable television, cable internet, Malta's only 3G mobile network and a super-fast internet speed of 50Mbits per second, among others. Melita is the leading home entertainment and communica-tions provider in Malta with over 300 employees. We count over 100,000 television subscribers, we are the number one broadband provider with the country's fastest broadband service - 50Mbps - and we offer the cheapest fixed-line and mobile telephony," said Mr Wright.
"We are now planning this further expansion across our areas of business. We are developing powerful new products which will continue to place Melita and the Maltese islands at the forefront of practical applications of advanced com-munications and home enter-tainment technology," said Mr Wright.
Bank of Valletta is managing the bond issues and is also bond registrar. Rizzo, Farrugia & Co. (Stockbrokers) Ltd are sponsoring stockbrokers. Forms and copies of the prospectus are available from all banks and authorised financial intermediaries.