AX Group issues €40 million 5.85% unsecured bonds

AX Group p.l.c. has announced the issuance of €40,000,000 5.85% Unsecured Bonds maturing in 2033, having a nominal value of €100 per bond issued and redeemable at par.

From the proceeds of the bond issue, up to €40 million in the form of exchangeable bonds surrendered by existing bondholders in favour of AX Group by virtue of an exchangeable bond transfer resulting in the purchase of exchangeable bonds, will be utilised for cancellation.

The proceeds derived from the balance of the bonds not subscribed for by existing bondholders, as well as any amounts received through the exercise of the cash top-up, will be used by AX Group for the redemption of the outstanding amount of the exchangeable bonds remaining in issue as at 6 March, 2024, being the redemption date of the exchangeable bonds.

The AX Group is primarily engaged in four business divisions, namely hospitality, healthcare, real estate and development, and construction, and is also involved renewable energy.

The Group’s finance and investment division provides finance to AX Group and its subsidiaries and also manages certain strategic assets.

The ‘AX Hotels’ brand has carved a unique status in the local hospitality market as a hotel operator that caters for a wide range of diverse tastes.

Across its seven group hospitality properties located in Valletta, Sliema and Qawra, as well as its various food and beverage outlets, the group’s hospitality division is the largest operating division of the AX Group.

The operations of the ‘AX Hospitality’ chain are carried out by AX Hotel Operations p.l.c., a company headed by Group Hospitality Director Claire Zammit Xuereb, one of the Executive Directors of AX Group.

The Group’s total assets as at 31 October 2022 stood at €422.8 million (FY2020: €348.7 million) comprising mainly of the property used by the Group in the operations of its various divisions and investment property, which as at 31 October 2022 had a carrying amount of €281.4 million and €57.9 million respectively.

The Group’s non-current inventories stood at €37.0million as at 31 October 2022 representing the Verdala residential project in Rabat and a property in Sliema acquired for development in FY2022. In aggregate, property plant and equipment, investment property and non-current inventories represent 89.0% of total assets.

Over the FYs 2020 to 2022, the Group’s total assets increased by 21.3%, largely reflective of the various development projects undertaken by the Group as well as revaluation exercises carried out during the said period on selected properties of the Group.

The Group’s other assets include an investment in Valletta Cruise Port p.l.c., Imselliet Solar Ltd and Hardrocks Estates Ltd, loans receivable, trade and other receivables, and current inventories.

Total liabilities amounted to €174.5 million as at 31 October 2022, representing an increase of 33.0% over the balance as at 31 October 2020 of €131.2 million. As at 31 October 2022, borrowings (namely bank loans and overdraft facilities) and debt securities in issue represented the greater proportion of liabilities for a total value of €120.3 million (FY2020: €78.7 million), equivalent to 68.9% of total liabilities.

The increase in borrowings includes the issue of the AX Real Estate p.l.c. 2022 bonds of €18 million held by the public as well as two new bank loans drawn during the period.

Other liabilities included mainly trade and other payables, and deferred tax liabilities.

The Group’s total equity as at 31 October 2022 amounted to €248.2 million of which €13.3 million was attributable to non-controlling interests. This represented an increase of 14.2% when compared to the total equity as at 31 October 2020 (FY2020: €217.4 million of which €1.0 million was attributable to non-controlling interest).

The increase in the non-controlling interest was a result of the equity issue of AX Real Estate p.l.c. during FY2022. The growth in net assets over the three FYs 2020 to 2022 principally emanated from an increase in the revaluation reserve, which reflects the impact of the revaluation exercises carried out by the Group during the said period.