A publicly listed real estate company is asking investors to give it more time to repay a €3.2 million bond.
The company, Central Business Centres (CBC), boasts a portfolio of six commercial properties, which it values at €75 million, and includes the Savoy Arcade in Valletta and a property in Żebbuġ housing a Lidl supermarket.
On August 31, CBC is meant to repay the money it borrowed from investors via a one-year bond. However, in a mid-August company announcement, CBC called a meeting for August 28, at which it will ask investors to vote on granting it more time to repay the €3.2 million debt.
In the company announcement, CBC said it is “actively pursuing” the implementation of a long-term financing solution, which will cover recent property acquisitions, its outstanding debts, as well as a promise-of-sale agreement signed in July for an additional commercial property.
The financing plan was meant to be in place by the time the €3.2 million bond came due, but a number of “practical and procedural factors” impacted the timeline, a CBC spokesperson told Times of Malta.
CBC made no mention of the need to extend the payment date of the €3m bond in its interim financial statements published on August 8
According to the spokesperson, CBC deliberately balances retaining prudent levels of borrowing to support profitability and shareholder value, while keeping the option of reducing debt through asset liquidation, if necessary.
Stockbroker Edward Rizzo noted in a Times of Malta article how CBC made no mention of the need to extend the payment date of the €3 million bond in its interim financial statements published on August 8. He further noted how the vote on extending the repayment date will take place just three days before the €3.2 million debt was meant to mature.
In response to questions by Times of Malta, a CBC spokesperson said that once it was evident that the financing would not be in place within the original timeframe, the company informed the market.
“The company acted promptly and transparently once the delay became unavoidable, and the vote has been scheduled at the earliest possible date permitted by law and regulation,” the spokesperson said.
The spokesperson added that while it is very confident investors will view the proposed extension as an additional opportunity to earn an “above market return”, CBC has committed to repay any bondholders who decide not to vote in favour of the extension.
Apart from the €3.2 million bond maturing in August, CBC has another €3 million bond repayment due in December.
The CBC spokesperson said the company is confident it will have the necessary financing in place to repay the December bond.