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11 maltatoday | SUNDAY • 26 JULY 2020 NEWS Employment part-financed by the European Union under the European Social Fund – European Structural and Investment Funds 2014-2020 OFFICE OF THE DEPUTY PRIME MINISTER MINISTRY FOR HEALTH The Ministry for Health is accepting applications for the position of a Project Administrator For the Project "ESF 04.0084 - Reform in the public health system to maximise efficiency gains and enhance governance" More details regarding the above vacancy and application can be accessed from the Government website http://recruitment.gov.mt and Government Gazette issued on Friday, 24 th July 2020. Interested persons are to submit their application, together with a detailed Curriculum Vitae, by not later than 13.30hrs (Central European Time) of Friday, 7 th August 2020. Melite meets resistance over bond restructuring MATTHEW VELLA THE Melite retail group has been asked by financial con- sultants and stockbrokers to rethink its plans to ask bond- holders to accept a reduction of its bond interest rate, after the COVID-19 pandemic's retail shutdown in Italy led to a re- scission of shop leases. The high street fashion fran- chise suffered a massive busi- ness disruption in its main Italian markets due to the pan- demic, after having already reg- istered reduced turnover and margins in 2019. The Maltese retail group – owned mainly by the Alf. Miz- zi Group and Lidsdale Limited – holds some 25 leases in the north of Italy for retail stores of the globally known Accessorize and Calvin Klein brands. The bleak outlook for the Ital- ian retail market will only see weak demand in the coming months, possibly lasting well in- to 2021. And despite retail out- lets re-opening in Italy, virtually all of Melite's tenants elected not to re-open at the start of summer: its sister company Melite Italia entered a process of voluntary administration to terminate 21 sub-leases while the sub-leases of two stories will be rescinded, leaving just two of Melite's 25 leases occupied by tenants. Bondholders who spoke to their market representatives re- ported that a confidential meet- ing held with Melite's directors revealed a "palpable" negative feedback. One bondholder who spoke to MaltaToday on condition of an- onymity, was told that Melite's shareholders proposal to loan the company some €1 million, which would be repayable, was described as "paltry". "If there are doubts on solven- cy, it does not seem enough that the shareholders attempt to fi- nance the company through a repayable loan. I think it is unfair that ultimately it is bondholders who must bear the brunt of the restructuring by taking a reduc- tion in our coupon, and seeing a substantial part of the security for bondholders given up." There has never been a default on the Maltese stock exchange, even in the smaller 'second di- vision' of the prospects market. Melite's request to bondholders is the first restructuring pro- posal tied to COVID-19 effects, with some observers who spoke to MaltaToday suggesting that the next steps will have an effect on the confidence of retail in- vestors in bond issues. "The Melite bond was pro- moted as a secure bond, and the company's shareholders do have standing the market. So resistance from the market to the restructuring plan knocks the wind out of their sails," one market player, who spoke on condition of anonymity, said. The company has to boot suffered in its pre-COVID per- formance, which saw a marked reduction in turnover and profit margins in 2019, primarily by its primary franchise Accessorize. COVID-19 precipitated matters for Melite by altering a turna- round plan intended to address the 2019 performance. Melite issued a €9.25 million bond in 2019 to finance a re- structuring of the group. Its principal activity is the acquisi- tion and sub-leasing of property rights for Italian retail outlets, valued at €10 million. But Melite's plan to preserve the majority of its property rights will involve first the re- scission of nine out of 25 leases. Additionally, the shareholders of parent company Melita Re- tail will advance €1.1 million as part-capital contribution to the company (€630,000) that will be repayable at the option of the company after the 2028 bonds are redeemed; and €470,000 in a non-interest loan, repayable within five years. The group will also be taking recourse to the COVID Guar- antee Scheme offered by the Malta Development Bank, for a €449,000 loan to fund the forth- coming bond interest payments in November 2020. However, the group also want to ask bondholders to reduce the bond interest rate from 4.85% to 3.5% as from Novem- ber 2021. This will require hold- ing a bondholders meeting. Melite's directors – Andrew and Christian Ganado, Jacque- line Briffa, Alan Frendo Jones, Stanley Portelli and Paul Mer- cieca – said they had reasonable expectation that the company had adequate resources to con- tinue operating with bondhold- er approval for the changes in the bond interest rate. Maltese franchise- holder for Accessorize and Calvin Klein in Italy told to "rethink" plan on refinancing bond after COVID-19 shuts down retail