Company News Safeguarding property rights in Upper Italy
These injections are intended to provide relief to the Melite Finance Group and the underlying business in this extremely difficult and uncertain time, allowing the board of directors of the company, and Melite Properties’ management, to forge a plan which would see the Melite Finance Group retain as much as possible of the value of the property rights it holds and on which the future servicing and repayment of the bonds is ultimately dependent.
The plan is designed specifically to salvage those stores (around 17a out of 26 stores) which, based on advice from commercial real estate specialists, are expected to be more likely to be sub-leased (mainly as not located in the harder-hit shopping centres, but in city-centre locations) and to attract the higher margin between the pre-COVID-19 value of the property rights and the annual rent payable to landlords.
The company thus remains intent on pursuing the restructuring plan referred to in its previous company announcement and described in the audited financial statements of the company for the financial year ended 31 December 2019 as published together with such announcement.
As explained, the principal purpose of such plan is to support Melite Properties in preserving its property rights over as many of the stores as possible.
Certain elements of the said plan require the approval of bondholders. For this purpose, the company is in the process of drawing up a bondholders’ circular for distribution to bondholders in advance of an eventual bondholders’ meeting to be convened in terms of section 5.12 of the Securities Note forming part of the Prospectus dated 12 November 2018. Such circular, together with the unaudited interim financial statements of the company for the period ended 30 June, which are expected to be published by the end of this month, are intended to provide bondholders with the information necessary to evaluate the proposals to be presented to bondholders for consideration and, if thought fit, approval.