Midi's bond issue was not the pressing of a panic button to raise funds but part of a larger financial plan, company chairman Albert Mizzi said yesterday.
The plan included international sales and rents as well as banking facilities aimed at generating funds to complete the Tigné and Manoel Island projects.
Midi, the developers of the projects, yesterday officially launched the offer for €30 million seven per cent bonds, denominated in euro and sterling.
The bonds are of a nominal value of €100 and £100 per bond and mature in 2016-2018. They are being issued at par. If the bond issue is over-subscribed, Midi plc may issue an additional €10 million. Minimum bids start at €2,500 and £2,000 respectively.
Midi chief executive Ben Muscat said the bonds were also being offered in sterling denominations to act as an incentive for those who had large amounts of sterling currency and sought to invest them at lucrative rates until the currency regained strength. This, he said, would be seen as preferable to selling off the currency now while it was low and suffering a loss.
Mr Muscat pointed out that the €450 million development did not just include apartments but involved structural works and the regeneration of two prime sites.
As part of the project, Fort Tigné and Fort Manoel were also being restored. The restoration of Fort Manoel was at an advanced stage, he added, while the restoration of Fort Tigné was progressing well.
The Tigné development, which Mr Muscat said was roughly half-way through, was estimated to require another €199.6 million for completion. The bond issue would provide €23.73 million of that figure. Pre-placement for the bonds, which closes on Monday, was limited to €12 million, he said, meaning the bonds would also be open to the public.
The development, he said, would include a piazza open to all pedestrians, which would be a hub for commercial interests and serve as a café and relaxation and recreation area.
Completely pedestrianised, all the traffic will be directed to flow underneath the piazza. Mr Muscat stressed that the piazza will be the largest open pedestrian space in Sliema and, once regenerated, Tigné Fort would be the only historic attraction of its kind in Sliema.
Mr Muscat said Midi had already sold 235 apartments of the 260 launched so far since 2006. Thirty per cent of the buyers, representing more than €50 million of sales to date, were foreigners.
HSBC's head of global banking and markets, Charles J. Farrugia, who is co-managing the bond issue with Bank of Valletta, said he was confident the bonds would attract enough interest for Midi to sell the full €40 million worth.
Subscriptions for the bonds will open on Tuesday and close on January 20, or earlier if the number of applications warrants this.