Malita, an investment holding company whose majority shareholder is the Government of Malta, is giving all shareholders the opportunity to increase their shareholding in Malita, while making available new shares to new investors.

What is the corporate strategy of Malita Investment plc and who may participate in this proposed investment opportunity?

Malita Investments plc (Malita) operates as an investment holding company and its principal activities include the financing, acquisition, development, management and operation of immovable property, in particular, projects of national and, or strategic importance.

Malita has been listed on the Malta Stock Exchange since 2012, following a fully subscribed Initial Public Offering (IPO).

The Government of Malta is the majority shareholder of Malita, currently holding 79.74 per cent of the issued share capital, with the general public holding 20.26 per cent.

Marlene Mizzi, Chairperson, Malita Investments plc.

In light of substantial investments undertaken in recent years, Malita now intends to raise equity capital via a rights issue which, if fully subscribed, will result in a capital injection of approximately €33 million and see a further 65,825,806 new ordinary shares of a nominal value of €0.50 being issued (the Rights Issue).

The rights issue gives all shareholders of Malita as at the record date of February 20, 2024 an opportunity to increase their shareholding in Malita, at a ratio of four new shares for every nine shares held as at said record date, at an offer price of €0.50. Eligible shareholders may also choose to assign their rights to third parties (whether existing shareholders or otherwise), or to apply for more shares than they are entitled on the basis of the said ratio.

However, there are also new ordinary shares available for subscription by new investors who are not presently shareholders of Malita. Indeed, the Rights Issue represents an opportunity for investors who are currently not shareholders of Malita to invest in the company. In this regard, it is pertinent to note that the Government of Malta, as majority shareholder, provided an irrevocable undertaking to the company to the effect that whilst it is committed to subscribe to its proportionate entitlement in full, it would renounce to a portion of its entitlement as would enable Malita to satisfy subscriptions by other investors, as long as on conclusion of the Rights Issue the Government retains at least 70 per cent of the issued share capital of the company.

Could you provide information on Malita’s projects and investments?

The principal projects which have been undertaken by Malita since incorporation include: the acquisition by title of temporary emphyteusis from the Government of Malta of the land over which the Parliament Building and the Open-Air Theatre were developed; the City Gate development in Valletta, consisting of the development of the Parliament Building, the re-purposing of a historical site into the Open-Air Theatre, and the landscaping of public areas; and the acquisition, from the Government of Malta, of the title of dominium directum over the Malta International Airport (MIA) Site and the VCP Site. Malita’s latest investment is the Affordable Housing Project – the company acquired various sites from the Housing Authority and the project involves the construction and subsequent rental of a number of housing accommodation units on the land acquired.

Could you provide more insight on the Affordable Housing Project?

The project consists of 752 units, 502 garages and 186 car spaces. A total of 153 units and 94 garages are complete, while in 2024 a total of 308 units will be complete. In 2025 a further 24 units will be complete while the remaining 267 units will be complete in 2026. The expansion of the project, in addition to other factors beyond the control of Malita such as increased costs driven by supply chain constraints, resulted in an increase in the scope of funding. The net proceeds of the Rights Issue will be utilised to part finance the completion of the project, with the balance being funded through a combination of new credit facilities with reputable international banks.

What are the salient attractions of Malita’s business and income profile?

The company’s revenues arise from relevant long-term contractual agreements that also provide for the periodic revision of the rents. On this basis, Malita’s business profile is characterised by income streams that are highly consistent and predictable.

Malita’s overall cash outflows and returns also carry a high degree of visibility. Net of mainly administration costs and taxes, the company’s resulting cash surplus is applied in the distribution of dividends to shareholders and the servicing of borrowings.

What about Malita’s Dividend Policy?

It is the policy of Malita to pay an interim and final dividend each year, and the company has a historic track record in this respect.

While dividend distributions depend on several factors, including available profits, the company directors’ view on the prevailing outlook, debt agreements and covenants, capital expenditure plans, Malita aims to provide investors with an attractive and stable dividend income stream.

As noted in the Prospectus, Malita’s objective is to objective to continue distributing total gross dividends amounting to an estimated €0.0350 per share, equivalent to an estimated gross dividend yield of at least 7 per cent on the rights issue price.

The Prospectus approved by the Malta Financial Services Authority and a presentation on the key features of the Rights Issue can be accessed here.

An informed investment decision can only be made by investors after they have read and fully understood the Prospectus which has been approved by the Malta Financial Services Authority and the risk factors associated with an investment in the shares, and with the company’s business. If any risks materialise, the value of the shares offered by the company, could be adversely affected. Prospective investors should consult their own independent financial and other professional advisors.

Furthermore, any forward-looking statements which involve projections and assumptions of future circumstances of the company, are subject to a number of risks, uncertainties, assumptions and important factors that could cause actual risks to differ materially from the expectations of the company’s directors. Past performance and current results are not indicators of future performance. No assurance is given that the future performance of the company will align with the directors’ current expectations.