GAP GROUP P.L.C.
Annual Report and Consolidated Financial Statements for the year ended 31st December 2022
__________________________________________________________________________________ DIRECTORS' REPORT – continued
Bonds in issue
At the end of the year, the company had four bonds in issue, namely the GAP Group p.l.c. 4.25% Secured Bonds 2023, the GAP Group p.l.c. 3.7% Secured Bonds 2023 – 2025, the GAP Group p.l.c. 3.9% Secured Bonds 2024 – 2026 and the GAP Group p.l.c. 4.75% Secured Bonds 2025 - 2027.
During the year, on 5 April, the company redeemed in full the remaining balance of the GAP Group p.l.c. 3.65% Secured Bonds 2022, amounting to €29,118,400.
As at 31 December 2022 the aggregate amount of bonds in issue amounted to €72,585,847 being, €8,349,900 Gap Group p.l.c. 4.25% Secured Bonds 2023, €20,848,853 Gap Group p.l.c. 3.7% Secured Bonds 2023 – 2025, €20,720,588 Gap Group p.l.c. 3.9% Secured Bonds 2024 – 2026 and €22,666,506 Gap Group p.l.c. 4.75% Secured Bonds 2025 – 2027.
Reserve Account
Pursuant to the bond prospectus of the 4.25% Secured Bonds 2023, the 3.7% Secured Bonds 2023 - 2025, the 3.9% Secured Bonds 2024 – 2026 the 4.75% Secured Bonds 2025 – 2027, a reserve account had been created by the Security Trustee to cover for the redemption of the four bonds. All sales of units forming part of the hypothecated property in favour of the bond issue shall be made on the condition that these units are freed from hypothecary rights and privileges against an agreed amount from the sale proceeds being deposited in the said Reserve Accounts.
By 31 December 2022, the Reserve Account of the 4.25% Secured Bonds 2023 carried a balance of €8,814,554 (i.e. 100% of the total bond repayment) and the Reserve Account of the 3.7% Secured Bonds 2023 - 2025 carried a balance of €652,500 (i.e. 3% of the total bond repayment).
Moreover, the trustee held an amount of €4,708,085 with respect to the 3.9% Secured Bonds 2024 – 2026 and €22,684,806 with respect to the 4.75% Secured Bonds 2025 – 2027. Both amounts were available for immediate withdrawal to finance the developments costs incurred on Mulberry Park project in Qawra, The Pantheon in Mosta and the upcoming project in M’Skala.
Principal risks and uncertainties
Although the development works of the afore-mentioned projects and the securing of new sales by way of preliminary agreements are progressing as planned, the company is still subject to several financial risk factors including the market, economic, counter-party, credit and liquidity risks amongst others that may affect the projects and their timely completion. Additionally, the directors are monitoring closely inflationary risks resulting from the conflict in Ukraine and the aftermath of the COVID pandemic. The directors are confident that the company has robust measures in place to mitigate the likely possible effects of inflationary pressures. Where possible, the board provides principles for the overall risk management as well as policies to mitigate these risks in the most prudent way.