GlobalCapital secures €10 million finance to settle 2016 bond payment

GlobalCapital plc’s €10 million 5% unsecured 2021 bonds has been oversubscribed, the insurance specialists said, securing the necessary finance to pay off a 2016 bond maturity.

Existing bondholders will be receiving the full amount of new bonds applied for by them. An allocation policy will be announced at a later stage for the scaling down of applications received from professional clients.

The bonds will be admitted to listing in the Malta Stock Exchange on 13 June and trading in the bonds will start on 15 June.

Proceeds from the new bond issue were used for the payment of the 5.6% GlobalCapital bonds which matured on the 2 June 2016. Payment of principal and interest of the matured bonds has been dispatched, the company said.

GlobalCapital expressed gratitude to all investors who held the matured bonds and investors who extended their support by subscribing for the new bonds.

The company had intended to finance the bond repayment from an injection of fresh capital through a €15 million rights issue to shareholders.

In 2015 the company was rocked by the appointment of conservators for its main shareholder, British American Insurance of Mauritius (BAI), which holds 48.5% of GlobalCapital’s shares. GlobalCapital’s former chairman, Dawood Rawat, was forced to resign after Mauritian authorities accused him of running a €960 million Ponzi scheme through one of his subsidiaries, the Bramer Banking Corporation. Bramer’s 30,000 deposit accounts were taken over by the State Bank of Mauritius.

Soon after May, Italian banker Paolo Catalfamo – an honorary consul-general for Mauritius in Italy – announced that his company EIP plc would acquire BAI’s entire shareholding, subject to regulatory approval.

EIP intended to finance its participation in the €15 million rights issue by raising additional equity “from potential new investors known to EIP”.

In March 2016, the group generated €4.7 million through a rights issue offer following which Investar plc became the majority shareholder of the company with a 52.6% shareholding. These funds were placed in a sinking fund for the repayment of the bond.