Big Bon bond announcement expected by end week

By David Lindsay

In the latest corporate bond issue to be released on the Malta Stock Exchange, the Big Bon Group is expected to announce its first bond issue on Friday.

However, Malta Stock Exchange rules prohibit the release of the exact details, including the amount to be issued and the bonds’ coupon rate, before it gives its formal go-ahead, which is expected to be granted tomorrow.

The bond issue is to be made by the company Big Bon Finance plc, which has been set up for the purpose, and whose directors are brothers Paul, Mario and Bernard Gauci - originally of the Big Ben family - and Lawrence Zammit - chairman of Malta International Airport and director of MISCO.

The details made available so far show that the bonds are to be fully secured against the building that once housed the Alhambra cinema at the Sliema Ferries. Today the building houses Zara, the Spanish clothing franchise that entered the Maltese retail market just over two weeks ago to large public response.

The bonds are to be guaranteed by Alhambra Complex Ltd and Alhambra Trading Ltd, which form part of the Big Bon Group. Stockbroking sources say that this is the first time a Maltese bond issue, offered to the general public, is to be fully secured against property.

The Alhambra building, bought by the Big Bon Group specifically to house the Zara franchise in Malta, has more than 2,000 square metres of retail space, in line with Zara's requirements for its franchises the world over.

The proceeds of the bond issue are expected to be used for re-financing the acquisition and completion costs of the building, and to continue to diversify sources of debt financing while also improving the cash flow and management of cash resources of the company.

The Big Bon Group has grown exponentially by Maltese standards over the last decade. It began trading under the Big Bon name in 1990, after brothers Paul, Mario and Bernard Gauci bought out their 12 siblings from what, until then, had been a family business operating under the name Big Ben.

The brothers no longer have any business connection with the Big Ben name or their siblings and have since gone their separate ways. Since then they have purchased a one-third stake in the Dragonara Hotel, a 50 per cent stake in the Valletta Embassy complex, the Alhambra cinema building, the furniture company Carmelo Delia, and various pieces of prime property, apart from owning the franchises for Zara, Mango, Pull & Bear, Esprit, Champion, Vero Moda, Secopal, and other brands. They have also bought out the full shareholding of the Abanderado factory in San Gwann, which continues to be a thriving business.