Hospitality entrepreneur Hugo Chetcuti plans €5 million bond issue

Hospitality and entertainment mogul Hugo Chetcuti is poised to launch a €5 million bond issue on the small cap market.

Chetcuti, whose Hugo’s brand covers a substantial portion of Paceville real estate, has roped in former Bank of Valletta chief executive officer Tonio Depasquale, and long-time MIDI plc CEO Ben Muscat as directors of his finance vehicle, HH Finance plc.

Chetcuti is planning a €5 million issue at a coupon of 5%.

Chetcuti was already reported as having signed a promise-of-sale agreement for the acquisition of Villa Priuli, in the Balluta Bay area of St Julian’s.

In December 2017 he posted a photo of the view from the stately villa’s terrace with the message: “Next, luxurious suites… by Hugo’s”.

Dutch property entrepreneurs were already seeking investors to turn the iconic home into a boutique residence and hotel.

For years, the 18th century period home has lain unoccupied, placed in the shade by the towering Meridien hotel.

But the unique villa is a scheduled Grade 2 property that is tagged with a “very high” cultural heritage value assessment.

The villa requires restoration and renovation to become the boutique residence that can offer top-quality suites and a personalised service suitable for upscale leisure tourism.

Industry observers told MaltaToday that Maltese retail and institutional investors were yearning for opportunities to invest in high-yield coupons for the medium term.

The last bond issue to come on the market was from the retail giant Hudson, which manages franchise brands Nike, New Look, Timberland and KIABI.

The group operates 25 retail stores and holds franchise agreements with a further six stores.

The proceeds of the €12 million bond issue at 4.35% interest rate will be used to refinance €2.78 million in outstanding loans used for new store openings, €4.5 million as a loan to parent company Hudson Holdings and new retail stores in Morocco, Italy and Algeria, €2.5 million for a new Malta distribution centre for international trading operations, and €2 million for new Malta stories and renovation of three stores.