20,000,000 6.2% Bonds 2017 2020 with an option to increase up to - - PowerPoint PPT Presentation

€20,000,000

6.2% Bonds 2017 – 2020

with an option to increase up to €25million

The Tumas Group

– Privately owned Group tracing its origins to the 60s. The Group was

founded by the late Tumas Fenech as a real estate business

– Within four decades, the Group revolutionised the property business in

Malta, enabling a life style that fuses accommodation, hospitality, entertainment and leisure

– In the early 80’s, the Group moved into the hospitality sector and also

introduced timeshare to the Island. The Group owns 3 hotels in Malta and a 5 star hotel in France, on the banks of lake Genève.

– In the last 10-15 years the Group further diversified itself, yet retained its

core competencies, and has grown into other segments mainly gaming and port operations

3 Presentation to financial intermediaries – 31 May 2010

The Tumas Group – Key numbers

Employment

– Circa 1,300 direct full time equivalents

Turnover and results

– Group turnover €92million (audited) in 2008 – Profit before tax €4.1millon (audited) in 2008

4 Presentation to financial intermediaries – 31 May 2010

The Tumas Group today

Some 40 companies form the Tumas Group, operating both locally and overseas

Tumas Group Property development, management and leasing Hospitality & Leisure Management Services Retailing and Port

• perations
• Portomaso complex
• Tas Sellum residences
• Ta’ Monita estates
• Office space development
• Condominium management
• Halland Developments
• Hotel Leasing
• Various property holdings
• Hilton Malta
• Dolmen Resort
• Hilton Evian
• Oracle Casino
• Portomaso Casino
• Corporate back office
• Timeshare
• In house finance

companies

• Easysell KIA
• Valletta Gateway Terminal
• Eurojet

5 Presentation to financial intermediaries – 31 May 2010

Tumas Group bond issues and private placements

2002: Tumas Investments plc issued a (Lm7 million) €16.3million public guaranteed bond maturing in 2010-2012 2002: In October, the (Lm4.2 million) €9.7million private placement was listed on the MSE and since fully repaid 2003: Dolmen Properties plc issued a (Lm4.7 million) €10.9million public secured bond maturing 2010-2013 2004: Spinola Development Company Limited issued a (Lm5.5 million) €12.8million Floating Rate Note privately placed with financial institutions 2009: Tumas Investments plc issued a €25million public unsecured bond maturing in 2014-2016

6 Presentation to financial intermediaries – 31 May 2010

Issuer Guarantor

The Issuer and Guarantor

Spinola Development Co. Ltd.

7 Presentation to financial intermediaries – 31 May 2010

Organisational structure related to the Bond issue

8 Presentation to financial intermediaries – 31 May 2010

Tumas Investments plc – The issuer

–

Incorporated in 1999 as an SPV

–

Sole aim to raise financing from the general public and financial institutions for the SDC sub-group

–

This is the third public security issued by the company in 10 years

–

All its financial instruments and related finance costs are secured or guaranteed by Spinola Development Company Limited

9 Presentation to financial intermediaries – 31 May 2010

Spinola Development Company Limited – The Guarantor

–

Incorporated in 1966 to develop the Hilton Malta International – Purchased by Tumas Group in 1986

–

In 1996 it commenced the development of the Portomaso project in St. Julians

–

Today the company:

• employs circa 500 full time equivalents, in addition to subcontractors

and indirectly employed staff

• has substantially completed and delivered most of its up market

residential properties

• synonymous with a mature development providing a life style that

combines real estate with hospitality and leisure

10 Presentation to financial intermediaries – 31 May 2010

Organisational structure

11 Presentation to financial intermediaries – 31 May 2010

The Portomaso Development elements

Hilton Malta & Conference Centre Office & Commercial Areas Cark park Apartments Blocks 10 to 29 Marina Apartments Blocks 31/A Club 22

12 Presentation to financial intermediaries – 31 May 2010

Key Financials – Guarantor’s reported performance

2009 2008 2007 2006 €'000 €'000 €'000 €'000 Actual Actual Actual Actual Revenue 33,208 35,287 33,242 38,079 Development and operational costs (22,866) (24,934) (23,514) (25,671) Profit before interest, tax and deprecation 10,342 10,353 9,728 12,408 Analyised between: Sale of apartments & office space 2,241 2,751 3,678 6,886 Ongoing operations 8,101 7,602 6,050 5,522 Net finance costs (3,128) (2,918) (2,524) (2,931) Cash profits 7,214 7,435 7,204 9,477 Interest cover 3.31 3.55 3.85 4.23

13 Presentation to financial intermediaries – 31 May 2010

Hilton Malta benchmarked against other 5 star hotels

Source: Deloitte MHRA survey 2009, Hilton Malta

• 50

100 150 200 Occupancy AARR revPAR revPOR Payroll PAR Overheads PAR GOP% GOP per available room Hilton 2009 Hilton 2008 Five star average = 100

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Hilton Hotel and Ancillary Operations - EBITDA

15 Presentation to financial intermediaries – 31 May 2010

• 5,000

10,000 15,000 20,000 25,000 30,000 2003 2004 2005 2006 2007 2008 2009 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Revenue Hotel & ancillary operations

Hotel key success factors in 2009

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– Leading the market in rate and occupancy

– Maintaining number 1 position in fair market share – Flexibility to diversify from traditional markets – Increased productivity while maintaining standards – High revenue conversion rate

The Portomaso residential apartments

Expected future sales of €43 million, of which €22.4million are under a promise of sale agreement (67 units) Sold 359 Promise of Sale 67 Held for sale 31 Total apartments 457

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The Business Tower offices

– A prestigious business

address

– Rentable space fully

committed and still enjoying continued demand

– Many tenants linked to

financial services, an industry set to continue to grow

18 Presentation to financial intermediaries – 31 May 2010

Portomaso commercial elements

– A mature, fully rented

mix of facilities

– Well established anchor

tenants – Arkadia, casino, 22, Marina Restaurants, Pavillion

– All marina berths occupied – Car park usage growing

consistently This project is a hive of activity

19 Presentation to financial intermediaries – 31 May 2010

Sources of cash earnings

Apartment sales assuming less importance as stock is exhausted and

• perating businesses continue to mature

2,000 4,000 6,000 8,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Outright sale of property Long term commercial elements 20 Presentation to financial intermediaries – 31 May 2010

Key Financials – Guarantor’s reported financial position

Bond issue will be refinancing existing debt and will not impact existing gearing

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2009 2008 2007 2006 €'000 €'000 €'000 €'000 Actual Actual Actual Actual Total Assets 129,717 117,819 105,632 98,099 Total liabilities (19,119) (22,969) (21,953) (17,050) 110,598 94,850 83,679 81,049 Borrowings (net of cash & cash equivalents) 66,502 51,559 46,891 40,163 Capital employed 44,096 43,291 36,788 40,886 110,598 94,850 83,679 81,049 Gearing 60% 54% 56% 50% Asset cover 1.66 1.84 1.78 2.02

Financial objectives

– Existing borrowings of €70million will be reduced to circa €37 million once all

apartments are disposed of estimated by 2016 and subsequently to €25million.

– This will ultimately represent circa 22% of the estimated market value of the

project.

– We are looking to maintain a gearing of circa 25% to 30% long term. – SDC group aims to maintain a healthy balance between debt and equity. – In order to optimise upon the use of capital both external and internal and

maximising shareholders value

– Gradually replacing existing facilities with bonds or bullet loans that fit the plan –

this issue is a step in this direction

22 Presentation to financial intermediaries – 31 May 2010

Reserves within the resilience test

– No sales of commercial spaces or offices included – Partial refinancing of maturing bonds starting in 2016

Moreover:

– Potential earnings from possible extensions within Portomaso not considered – Similar approach adopted re Halland redevelopment

23 Presentation to financial intermediaries – 31 May 2010

The Bond Issue

24 Presentation to financial intermediaries – 31 May 2010

Bond Issue – Salient Points

• Issuer:

Tumas Investments p.l.c.

• Guarantor:

Spinola Development Company Limited

• Amount:

€20 million (+ €5 million over-allotment)

• Coupon:

6.2%

• Interest:

Semi-annual (Jan / July)

• Term:

2017-2020 (8 – 10 years)

• Final maturity date: 9 June 2020

25 Presentation to financial intermediaries – 31 May 2010

Purpose of the Issue

–

The net proceeds of the Bond Issue amounting to approximately €19.5 million (or €24.5 million in the event of the exercise of the Over- allotment Option) will be used – by the issuer to redeem 6.7% 2010-2012 bond amounting to €16.3million by exercising the issuer’s option redeem earlier than the final maturity date. – The remaining net proceeds of the bond issue will be advanced to the Guarantor for the part re-financing of existing borrowings and the general corporate funding purposes of the SDC Group.

26 Presentation to financial intermediaries – 31 May 2010

Other Details

–

Status: Unsecured but guaranteed by SDC

–

Negative Pledge: The Issuer and the Guarantor will at all times until the redemption of the bonds hold assets amounting to at least 107% of the aggregate principal amount of all debt

–

Reserve A/C (Sinking Fund): Tumas Investments will build a cash reserve starting from the end of the 2012 financial year until the redemption date, amounting to at least 50% of the outstanding bonds

27 Presentation to financial intermediaries – 31 May 2010

Timetable

–

10th June: Formal Notice/Company Announcement

–

10th June: Application Forms for preferred applicants

–

11th June: Application Forms available to General public

–

23rd June: Closing date of preferred applicants

–

25th June: Opening of Subscriptions

–

2th July : Closing of Subscriptions

–

9th July: Announcement of basis of acceptance and commencement of interest

–

16h July: Dispatch of allotment advices and refunds

–

21th July: Listing on the Official List

28 Presentation to financial intermediaries – 31 May 2010

Advisers

Legal Counsel: GVTH Advocates – Dr Michael Grech / Dr Luca Vella Reporting Accountants and Auditors: PricewaterhouseCoopers – Mr John Zarb / Mr Stefan Bonello Co-Manager & Registrar: Bank of Valletta plc – Mr Charles Borg / Mr. Aldo Scardino / Ms Donatella Barbara Co-Manager : HSBC Bank Malta plc – Mr Simon Bonett / Mr Josef Figallo Sponsoring Stockbrokers: Rizzo, Farrugia & Co (Stockbrokers) Ltd – Mr Vincent E Rizzo / Mr Edward Rizzo

29 Presentation to financial intermediaries – 31 May 2010

Information on Pen Drive

–

Tumas Group Profile

–

Final Prospectus & Summary

–

Specimen Application Forms

–

Bond Issue Presentation

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Portomaso is a lifestyle statement, an icon in vision and standard setting. We want to capitalize on this and share our success with a wider audience of bond holders investing in Portomaso.

Thank you for your attention

31 Presentation to financial intermediaries – 31 May 2010