Shoreline Mall is asking bondholders to give their seal of approval for a two-year extension on its €14 million bond, which matures in August 2026. In return for this favour, investors will receive a higher interest rate of 6.5 per cent – a 250 basis point increase from the current 4 per cent.

The company has convened an emergency meeting to vote on this proposal, citing ongoing construction-related disputes with Koray Global Malta Limited as the main obstacle to refinancing. Shoreline Mall stresses that it is not party to the underlying contract and argues that the court-imposed measures do not reflect any weakness in its operations or financial position.

However, these measures have created practical difficulties for the company, which has applied to substitute a garnishee order with a special hypothec over real estate assets owned by Shoreline Residence Limited. These properties are valued at approximately €44 million and could provide much-needed collateral for refinancing.

To further reassure investors, Shoreline Mall is proposing the establishment of a dedicated sinking fund if bondholders approve the extension. This fund would be fed by rental income from the mall once the garnishee order is lifted, as well as proceeds from the sale of six luxury villas in the Shoreline development.

The company has also promised not to repay intercompany loans or intra-group debt during the proposed extension period, prioritising bond repayment instead. Additionally, Shoreline Residence Limited and parent company Shoreline Holdings Limited will provide an indemnity covering any claims arising from the KGML litigation.

Shoreline Mall’s board is recommending that bondholders vote in favour of the proposal, describing it as a “strategically sound” measure that would allow sufficient time for the legal proceedings to be resolved, the villas to be sold, and the bonds to be repaid in full.