Allocation policy for Farsons shares, bond

The ordinary shareholders of Simonds Farsons Cisk plc have subscribed to the company's rights issue in full. Louis A. Farrugia, group chief executive, stated that this positive response follows closely on the overwhelming success achieved by the company in its recent bond issues.

Farsons announced that the company will be accepting all applications received by October 24 for its 1,714,286 new shares in full, including those in which ordinary shareholders applied for a number of new shares in excess of their entitlement.

At a meeting of the group funding committee, Mr Farrugia said that the subscription in full of the rights issue is a renewed message of confidence, this time by the ordinary shareholders, the investors in the Farsons Group. HSBC Bank Malta plc acted as manager and receiving agent.

The company will be informing all applicants of the new shares allotted to them.

The response to the recent Farsons bond issue was described by Mr Farrugia as "overwhelming". When opened for general public subscription on October 17, the offer had to be closed within an hour and a half.

Simonds Farsons Cisk plc received applications for a total value of Lm18,543,600, over four times the original aggregate total of Lm4.5 million on offer. The company decided to exercise the over-allotment option of Lm1.5 million by increasing the 6.25% Bonds 2006-2008 by Lm500,000 for a total of Lm2 million, and the 6.6% Bonds 2010-2012 by Lm1 million for a total of Lm4 million. This overwhelming response made the allocation even more difficult.

Now, all applications received in terms of the preferred allocation as defined in para. 2.6 Allocation Policy of the Offering Memorandum dated October 1, shall be met in full to the extent of their preferred allocation.

Applications received from preferred applicants for bonds in excess of the preferred allocation shall be met as follows:

Out of the Lm7,437,600 worth of bonds applied for through pre-placement arrangements as envisaged in para. 2.5 of the Offering Memorandum, an aggregate amount of Lm2,184,000 in bonds shall be allotted to the applicants concerned.

Applications received on October 17 shall be met as follows:

Mr Farrugia said that the allocation policy adopted ensures the fairest possible distribution of available bonds, despite the very strong demand for the bonds. Preferred applicants will receive their full entitlement plus a portion of any excess amount they requested. Similarly, the public will also be allotted a portion of any amount requested in excess of Lm500. In the case of institutions, their pre-placement offers will be met as to 14% regarding the 6.25% bonds and 34% for the 6.6% bonds.

Interest on the bonds started from October 26.