6.0% MEDSERV PLC 2020/23

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Medserv plc - Base Prospectus dated 12 August 2013

The Company

The Group started off with the establishment of Medserv Limited (which subsequently changed its name to Medserv Operations Limited) as a joint-venture between the Government of Malta and the Albert Abela Group on 1 December 1974. The Issuer (originally named AD Holdings Limited) was incorporated on 26 October 2001 and by 19 November 2003 it had acquired the entire shareholding of Medserv Operations Limited.

The Issuer is the ultimate parent company within the Group which has provided integrated logistical support services to some of the world’s leading oil and gas exploration companies such as ENI Group, Hess Corporation, Petrobras, Gazprom and Exxon amongst others. A number of international service companies also form part of the Group’s client base including Schlumberger, MI Swaco, Baker Hughes, Halliburton and Saipem.

Currently, the Group has facilities in Malta, Libya, Sicily and Cyprus. All operational facilities are certified by the International Standards Organisation (a certificate of quality) and are also ISPS compliant (a code to enhance maritime security). At the same time, the management team and in-house technical teams have decades of industry experience.

On 23 February 2016, Medserv plc completed the acquisition of the METS Group for USD46 million through a newly formed subsidiary Medserv M.E. Limited. The METS Group comprises a number of subsidiaries which provide and operate a comprehensive threading, repair, inspection and storage service for oil country tubular goods (OCTG). The METS Group operates through three sites in Sharjah (UAE), Sohar (Oman) and Basra (Iraq) having a total area of 292,000 square metres. The METS Group had an asset base of USD24 million as at 30 April 2015 and during the financial year ended 30 April 2015, it generated a net profit of just over USD3 million. The Directors of Medserv explained that the acquisition is in line with its long-term strategy of increasing its geographical and product spread as well as continuing to grow its customer portfolio of international oil and gas companies and subcontractors. In fact, this acquisition presents an opportunity for the Medserv Group to increase its scope of services and at the same time penetrate the well-established Middle-Eastern oil and gas service industry – a region where extraction costs are comparatively low. The acquisition will also lead to cross-selling opportunities whereby Medserv will be looking to offer services offered by the METS Group in markets in which Medserv already has a presence and vice-versa. The Directors also noted that, although the METS Group is focused on the onshore oil and gas industry whereas Medserv is concentrated on the offshore oil and gas industry, synergies can be created through the combination of the two groups.

Use of Proceeds

The net proceeds from the issuance of the first tranche of Notes, estimated at €19.56 million after issuance costs, were principally used by the Issuer as follows:

i) to on-lend €3.5 million to the Guarantor to enable it to prepay and cancel its current loan and overdraft facilities;

ii) to finance the installation and completion of the photovoltaic farm and related infrastructure by on-lending the funds to the Guarantor (approximately €5 million);

iii) to finance improvements and/or the development of the Group’s existing base in Cyprus and possibly other bases identified for this purpose by the Issuer (approximately €2.8 million);

iv) to finance the Group’s working capital in the amount of €1.3 million;

v) to on-lend circa €5.6 million to the Guarantor to enable it to purchase additional plant and machinery for the Medserv Site and to finance improvements to the Hal Far site;

vi) to finance further improvements and/or the development of the Group’s existing base in Cyprus (circa €1.2 million).

Status

The Notes are debt obligations of the Issuer secured by a guarantee and general hypothec granted by the Guarantor and also by a special hypothec granted by the Guarantor over the emphyteutical grant it holds in respect of the Medserv site valued at €40 million as at 30 June 2013.

In view of the security attached to the Notes, if the Issuer had to default on its obligations, Note holders may request the Security Trustee to use the Guarantor’s assets and its rights over the Medserv site to settle the amounts due under the Notes.

Guarantor

Medserv Operations Limited

Coupon

6.0%

Amount Issued

€20,000,000

ISIN Code

MT0000311218

Maturity

The bonds will mature at 100% (par) on 30 September 2023 but may be redeemed early at 100% (par) at any date between 30 September 2020 and 30 August 2023 by giving not less than 30 days notice.

Interest Payment

Semi-annually on 31 March and 30 September

XD Dates

15 March & 15 September

Listing

Official List

Directors

Anthony S. Diacono (Chairman), Anthony J. Duncan, Joseph F.X. Zahra, Joseph Zammit Tabona, Charles Daly and Laragh Cassar (Company Secretary).

Downloads

Medserv plc – Final Terms – 30 August 2013

Medserv plc – Final Terms – 7 April 2014

Medserv plc – Supplement to the Base Prospectus – 30 August 2013

Medserv plc – Supplement to the Base Prospectus as Supplemented by the Supplement dated 30 August 2013 – 7 April 2014

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