San Antonio bond to be announced on Friday

Hotel San Antonio plc will on Friday 19 April officially announce its bond issue of Lm2 million.

Hotel San Antonio plc owns the San Antonio hotel in Bugibba, which was opened by the prime minister two months ago – though it had been operational for some months prior to that. The company is a joint venture between Seabank Catering Co Ltd (represented on the board by Silvio Debono) and Alpine Holdings Ltd. (represented by Tony Zahra).

The hotel is known as the Grand Hotel Mercure Coralia San Antonio because it is under management contract to Accor Air Malta for 10 years. This is a partnership between Accor (the world’s 2nd largest hotels and leisure operator) and Air Malta.

The value of investment in the hotel was Lm10 million. The funds raised through the bond issue will be used to pay the remaining capital creditors, most of which have long-term repayment programmes, and others which are due for payment shortly. There is an over-allotment option that, if taken up, will be used to make early repayments on bank financing.

The San Antonio is built on the site of the former Hotel Hyperion, and is something new in the Malta tourism market because it falls between the four and five star categories (four star plus), while also having full resort, conference and health and fitness facilities.

The bond issue was first discussed last October, but has since been timed to coincide with the return of funds held by Maltese citizens overseas, under the government’s scheme for the repatriation of assets. There is a trend towards bonds, which give a fixed return at regular intervals, together with the reassurance of the return of capital in full on maturity. The decrease in bank interest rates has also turned people away from bank deposits. This means that demand for bonds now exceeds supply – as the recent oversubscription of the Corinthia and Malta government issues has shown.