5.75% MEDSERV PLC 05.02.2026 (USD)

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Medserv plc - Dual Issue Prospectus dated 21 December 2015

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 USD denominated bond were used to part-finance the balance of the purchase price (USD43 million) due in respect of the acquisition of the METS Group. The balance was financed through the proceeds raised from the euro denominated bond as well as a EUR15 million rights issue.

Status

The Bonds constitute the general, direct, unconditional and unsecured obligations of the Issuer, and shall at all times rank equally, without any priority or preference among themselves and with other unsecured debt of the Issuer.

As such, the Bonds rank below the €20 million 6.0% Secured Notes having a maturity date between 2020 and 2023.

Coupon

5.75%

Amount Issued

USD9,148,100

ISIN Code

MT0000311242

Maturity

The bonds will mature at 100% (par) on 05 February 2026.

Interest Payment

Semi-annually on 05 February and 05 August

XD Dates

21 January & 21 July

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).

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