5.1% PTL Holdings plc 04.12.2024

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PTL Holdings plc - Prospectus dated 03 November 2014

The Company

PTL Holdings plc was set up in December 2013 as the holding company of the IT division of the Hili Ventures Group. Hili Ventures is owned by Mr Carmelo k/a Melo Hili (50%) and the other 50% by his brother Mr Joseph k/a Beppe Hili and other members of his family. The business origins of the Hili family date back to 1923 through Carmelo Caruana Company Ltd. Hili Ventures incorporates a diversified group of companies, headquartered in Malta, with operations in more than 12 countries across Europe, the Middle East and Africa. It is involved in logistics and engineering; technology; property management; restaurant operations in partnership with McDonald’s and retail operations with Apple.

The Issuer does not undertake any trading activities and is the holding company and financing vehicle for the IT division. The main operations of PTL Holdings are SAD Sp z.o.o, APCO Limited and APCO Systems Limited (collectively referred to as APCO) and PTL Limited.

SAD Sp z.o.o

SAD was originally set up in 1991 and acquired by the PTL Group in June 2014 for €40.35 million. The company operates 22 Apple stores in various cities across Poland under the iSpot brand. SAD is the largest retailer of Apple in Poland. As an Apple Premium Reseller and Apple Authorised Service Provider, SAD offers a full range of Apple products (including software and accessories) and it also offers support and repair services to customers regardless of where the Apple product was originally purchased. Additionally, SAD is also involved in turnkey solutions for government agencies and businesses comprising the design and construction of networks and data security, including the supply of the required hardware and software. In addition, SAD is also a supplier of audio-video streaming and TV broadcasting equipment, and this niche allows SAD to provide TV stations, production companies, content owners and broadcasters with innovative technology and integration solutions for live and video programming.

As a certified Apple Authorised Training Centre, SAD participated in numerous projects relating to the implementation of Apple technology in higher education and to date it has supplied more than 2,000 school technology labs and provided training to around 8,500 teachers on IT.

SAD competes with other resellers of Apple products and services in Poland, and therefore the main competing factors are not price or quality of products, but location of stores, quality of service provided and share of the business-to-business market. Although PTL acquired SAD in July 2014, the Prospectus and the Financial Analysis Summary provide key financial figures for the last three financial years. Between 2011 and 2013, total revenue generated by SAD doubled from €38.6 million in 2011 to €77.3 million in 2013. While retail sales increased by 44% from €30 million to €43.4 million primarily as a result of 2 new store openings in 2012 and 3 new stores in 2013, the largest growth came from the corporate sector with overall revenue surging to €31.6 million in 2013 from only €6.9 million in 2011. SAD generated total EBITDA of €3.5 million in 2013 compared to €1.2 million in 2011. The EBITDA margin improved from 3.2% in 2011 to 4.5% in 2013.

APCO Limited and APCO Systems Limited

APCO was originally set up in 1987 and acquired by the PTL Group in August 2014 for €8.8 million. APCO provides electronic payments transaction processing services to retailers and internet-based merchants and operates under the brand name APCOPAY. Moreover, APCO is a supplier of ATMs, point-of-sale (POS) terminals, plastic cards, deposit machines, currency exchanges, automotive fuel payment systems and other cash-handling equipment.

APCO acts as the processing intermediary between the merchant, the credit and debit card networks, and financial institutions which issue the cards, offering to the merchant an array of services, including front-end authorisation processing, settlement and funding processes, industry compliance, billing and statement services, as well as online reporting system. Normally, APCO’s revenue is based on a percentage of the value of the transaction processed or a specified fee per transaction, as well as service fees for the additional services delivered to the merchant.

The recent financial performance of the APCO Group has been volatile as a number of merchants terminated their service in 2013. Despite this, the APCO Group is still a profitable operation with significantly higher margins than the other business units of the PTL Group.

PTL Limited

PTL is a multi-branded IT solutions provider targeting businesses and the public sector, primarily in Malta and, to a lesser extent, in the Middle East. It was originally set up in 1946 but has provided IT solutions since 1981. PTL was acquired by the Hili family in 2012. PTL offers comprehensive and integrated technology solutions through hardware, software and value-added service offerings aiming to allow customers to streamline their procurement processes by partnering with PTL as a complete technology solutions provider. The client profile of PTL can be divided into three: (a) the Retail and Distribution segment, to which PTL offers a range of services including POS devices, merchandising infrastructure and supply chain systems to customer loyalty programmes, security products and services; (b) the Banking sector, whereby PTL supplies deposit ATMs and other ancillary support services; and (c) the Public Sector (government entities and public sector organisations), to which PTL supplies hardware and software products and support services.

The PTL Group also includes two joint ventures as described below:

  • Hili Salomone Company Limited (50%): which operates 3 Apple stores in Hungary and another store in Romania under the brand name iCentre;
  • Smart Technologies Limited (30%): which is engaged in IT outsourcing services, leasing and rental of equipment such as laptops, desktops and netbooks.

Use of Proceeds:

The net proceeds from the Bond issue, estimated at €35.3 million after issuance costs, were principally used by the Issuer for the following purposes:

  • the first €20 million to refinance a short-term bank facility with HSBC Bank Malta plc, which funds were used to partly finance the acquisition of SAD;
  • to settle the remaining consideration due to the selling parties in relation to the acquisition of APCO (circa €4 million);
  • to repay loans granted by Hili Ventures Limited (the parent company of the Issuer) used for the purchase of SAD and APCO (circa €8.4 million);
  • to settle expenses incurred in the acquisitions of SAD and APCO (circa €1.6 million);
  • to refinance €0.8 million in bank loans with HSBC Bank Malta plc and Banif Bank Malta plc; and
  • the balance will be used for general corporate funding purposes of the Group (circa €0.5 million).

Status:

The Bonds shall constitute the general, direct, unconditional and unsecured obligations of the Issuer, and shall rank pari passu, without any priority or preference, among themselves and with other unsecured debts, if any, of the Issuer.Furthermore, the Issuer may, from time to time, without the consent of the Bondholders, create any other debt securities which may rank senior to the Bonds.

Coupon

5.1%

Amount Issued:

€36 million

ISIN Code:

MT0000511205

Issue Price:

100% (par)

Interest Payment:

Annually on 4 December

XD Date:

19 November

Maturity:

The bonds will mature at 100% (par) on 4 December 2024.

Listing:

Official List of the Malta Stock Exchange

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