Issue link: https://maltatoday.uberflip.com/i/556862
maltatoday, Sunday, 16 auguSt 2015 News GlobalCapital seeks €15 million rights issue for bond repayment Insurance firm makes first profit in seven years but auditors deloitte warn of doubts on ability to continue as a going concern unless new shareholders inject new capital Matthew Vella Profits that were registered for the first time in seven years by insurance specialist GlobalCapi- tal plc have been punctuated by a warning from auditors Deloitte, who have cast doubts about the company's ability to continue as a going concern. the company reported a profit after taxation of €222,671 com- pared to a loss in 2014 of €3.6 mil- lion, which it attributed to an "ag- gressive transformation strategy" of cost-reduction and disposal of all immoveable property in excess of requirements. But auditors Deloitte expressed doubts over the company's plans to finance a bond redemption in 2016 by increasing shareholders' capital by €15 million, amid plans to bring in italian bankers EiP plc to take over their parent compa- ny's shareholding. "the success of these plans, which is fully dependent on fund- ing from external investors, can only be determined at a future date. these circumstances indi- cate the existence of a material un- certainty that may cast significant doubt about the company's ability to continue as a going concern," Deloitte said in GlobalCapital's annual report. GlobalCapital's €17 million bond issue of 2006 (carrying 5.6% inter- est) is due for repayment at the lat- est by 2 June, 2016. the company intends to finance the bond repayment from the in- jection of fresh capital through a €15 million rights issue to share- holders. But the company was rocked in April 2015 by the appointment of conservators for its main share- holder, British American insur- ance of Mauritius (BAi), which holds 48.5% of GlobalCapital's shares. GlobalCapital's former chair- man, Dawood rawat, currently based in france, was forced to re- sign after Mauritian authorities ac- cused him of running a €960 mil- lion Ponzi scheme through one of his subsidiaries, the Bramer Bank- ing Corporation. Bramer's 30,000 deposit accounts were taken over by the state Bank of Mauritius. the appointment of the conser- vator does not relate to Global- Capital's operations. soon after May, italian banker Paolo Catalfamo – an honorary consul-general for Mauritius in it- aly – announced that his company EiP plc would acquire BAi's entire shareholding, subject to regula- tory approval. this would see EiP take up its pro-rata share in the planned rights issue, to secure a minimum investment of €14 million. the public offering is expected to be made by January 2016. EiP plc is a Malta entity reg- istered in May 2014, owned by Catalfamo and Andrea Zitelli, who have a background in invest- ment management, and having is- sued and paid-up share capital of €750,000. EiP intends to finance its par- ticipation in the €15 million rights issue by raising additional equity "from potential new investors known to EiP" even though to date there are no tangible commit- ments by third party investors. But GlobalCapital's directors said they are also actively consid- ering "other financing options po- tentially available to the group" in order to honour the bond redemp- tion. "such options are still under consideration and are commer- cially sensitive and although their success cannot be presently guar- anteed, the Board of Directors is confident that there will be sup- port from the relative stakeholders and other potential investors." the directors said in their annual report they have "a reasonable ex- pectation" for adequate resources to continue their operations. "Any judgement about the future is based on information available at the time at which the judgement is made… such judgements cannot be viewed as a guarantee regard- ing future events or conditions which cannot be predicted." mvella@mediatoday.com.mt In April 2015, GlobalCapital was rocked by an investigation into its main shareholder, British American Insurance of Mauritius (BAI), which holds 48.5% of GlobalCapital's shares, leading to the resignation of chairman Dawood Rawat (pictured).