Carlo Stivala to split from brothers and leave Stivala group business

Carlo Stivala, one of the four ultimate beneficial owners of Stivala Group Finance p.l.c., will be leaving the business operated by the company to pursue private business ventures, BusinessToday has learned.

He will be relinquishing all and any ownership interest in the Stivala group of companies.

Certain immovable properties currently owned by Carmelo Stivala Group Limited and North Harbour Limited – for a total value of €81.2 million – will be transferred to CAST Holdings Limited, a company that is ultimately owned by TRI-MER Services Ltd as trustee of the CAST TRUST, the beneficiaries of which are Carlo Stivala and his descendants.

Stivala is one of the executive directors on a number of group companies, and is a manager at ST Properties Ltd. His involvement in the Group’s business commenced over 20 years ago and his main responsibilities include the management of the Group’s long leases of residential accommodation and commercial outlets and offices.

Michael Stivala, CEO of Stivala Group of Companies, told BusinessToday that Carlo had felt it was tue to initiate his own business venture.

But he insisted that Carlo’s departure would not in any way affect the Group’s operations.

“The Group has an executive management team that is involved in the day-to-day running of the Group’s operations, while strategic and development decisions will continue to be taken by the major shareholders (Michael Stivala, Ivan Stivala and Martin Stivala) with the aim to continue to expand and grow its business,” he said.

“As such, Carlo’s departure will not impact in any way the Group’s operations.”

Stivala Group Finance p.l.c. is the holding company and finance arm of the Stivala Group and is the principal vehicle for further expansion of the Group’s hospitality business and mixed-use developments.

Its ultimate beneficial owners are Carlo Stivala and his brothers Martin John, Ivan and Michael, together with their direct descendants and families.

Stivala Group Finance p.l.c. holds 98% of the shares in Carmelo Stivala Group Limited which in turn holds the shares in the underlying operating subsidiaries. The remaining 2% of the shares in Carmelo Stivala Group Limited are held by the Group’s founder, Carmelo Stivala.

On 24 November 2020, Stivala Group Finance p.l.c., Carmelo Stivala Group Limited, Carmelo Stivala Trustee Limited, North Harbour Limited, ST Properties Ltd, ST Hotels Ltd, CAST Holdings Limited, CAST Renting Ltd, Ivan Stivala, Martin John Stivala, Michael Stivala and Carlo Stivala entered into a framework agreement.

Under the agreement, the shareholders of Stivala Group Finance p.l.c., Carmelo Stivala Group Limited and North Harbour Limited passed resolutions resolving to reduce the share capital of each of the companies by cancelling all shares held in them by Carlo Stivala and Carmelo Stivala Trustee Limited as trustee of the Seaside Trust, the beneficiaries of which are Carlo Stivala and his descendants.

Carmelo Stivala Group Limited, North Harbour Limited, Carmelo Stivala Trustee Limited, CAST Holdings Limited and Carlo Stivala also entered into a promise of sale agreement, whereby Carmelo Stivala Group Limited and North Harbour obliged themselves to sell, transfer and convey unto CAST Holdings Limited properties for a total aggregate value of €81.2 million,

This value represents the consideration due to Carlo Stivala and Carmelo Stivala Trustee Limited as trustee of the Seaside Trust, for them relinquishing all of their rights and interests in the share capital of the companies forming part of Stivala group of companies.

As at 30 June 2020, the total equity of Stivala Group Finance p.l.c. amounted to €125.9 million, represented by share capital of €0.3 million, retained earnings of €35.3 million and revaluation reserve of €90.3 million.

The Company's total equity would increase to €154.8 million on a pro forma basis on account of this revaluation of immovable assets and once the transactions contemplated in the Framework Agreement have been completed. After that, the remaining shareholders will be increase the Company's issued share capital by €30,000 to €255,000.

The property portfolio held by the Company as at 30 June 2020 was carried at a value of €203 million, which as set out in the pro forma statement of financial position will increase to €234.6 million, reflecting the aggregate uplift in carrying values of €71.3 million and a decrease of €39.7 million once the transfer of properties to Carlo Stivala (through CAST Holdings Ltd) is completed.

The increase in asset values represent the Directors' assessment of the fair value of the Company's properties, which is supported by valuations carried out by valuers with the appropriate recognised professional qualifications and experience in both location and category of the property being valued.

Current assets are expected to decrease by €1.0 million, reflecting the proposed transfer to CAST Holdings Ltd of certain properties in inventory and payment of deposits held in relation to rental properties to be assigned to CAST Holdings Ltd.

The major liability included in the Company's statement of financial position as at 30 June 2020 relates to the deferred tax liability arising in connection with the revaluation of investment property and property, plant and equipment, which amounted to €15.5 million.

This liability is expected to increase to €17.6 million once the transfer of properties to CAST Holdings Ltd is completed.

Michael Stivala told BusinessToday the whole process is expected to be finalised by end of Q1 2021.