On 3 March 2010, Premier Capital plc announced a €20 million bond issue at a coupon of 6.8% per annum. The bonds have a final maturity date of 15 March 2020. The Issuer reserves the right to increase the amount up to a further €5 million in the event of over-subscription.
Premier Capital plc, the parent company of the Premier Group, is equally owned by the 3 Hili brothers (Marin, Beppe and Melo). The company and its individual shareholders acquired 86.7% of the McDonald’s operation in Malta in 2005 and in 2007 became the development licensee for McDonald’s in Latvia, Lithuania and Estonia. The license agreement presented the Group with the responsibility of developing the McDonald’s brand whilst also having the right and responsibility of opening new restaurants in Malta and in the Baltic countries. Currently the Premier Group’s portfolio is made up of 30 restaurants split up as follows: 8 in Malta, another 8 in Lithuania and 7 restaurants in each of Latvia and Estonia. In 2009 1 restaurant in Latvia and another 2 in Estonia were opened while another McDonald’s outlet will be opened in a shopping mall in Estonia in April 2010.
The majority of the properties hosting the McDonald’s outlets are held under long-term lease contracts or concession agreements. The Premier Group owns only one of the restaurants in Lithuania and it has a further 4 properties in Latvia and Estonia which are rented out to other companies within the Group. The Premier Group aims to acquire some of the new restaurants that it intends opening and in the Prospectus it was stated that two properties have already been earmarked for potential acquisition and development subject to the requisite permits. The Maltese operating company, Premier Restaurants Malta Ltd. has reportedly identified premises in the South of Malta for re-development as a drive-through McDonald’s restaurant similar to the one situated within the premises of Malta International Airport. Meanwhile in Estonia, a plot of land has been identified for the construction of another McDonald’s restaurant. The Premier Group’s business falls within the retail food sector, more specifically under the ‘Quick Service Restaurant’ market.
Annually on 15 March
The bonds will be redeemed at 100% (par) on 15 March 2020 but may be redeemed on any day between 16 March 2017 to 14 March 2020.
Use of Proceeds
The net proceeds from this bond issue will be principally used by Premier Capital plc for:
1) Expansion & Development: €11.85 million (or €16.8 million in the event of oversubscription) will be utilised for financing the Group’s expansion and development programme over the coming 2 years. The Premier Group intends to acquire 8 new McDonald’s restaurants in Malta and the Baltic states but it does not exclude the entry into new territories. Part of the bond proceeds are also intended to be used to remodel existing McDonald’s outlets through conversion into hybrid restaurants and McCafes.
2) Debt Financing: €7.6 million will be utilised to part-refinance the Group’s existing bank debt.
Security & Status
Unsecured & Unsubordinated
18 March 2010
General Public Offer Period:
24-30 March 2010
Minimum Application for Bonds:
Preplacement: €10,000 (nominal).
General Offer Stage: €1,000 and in multiples of €100 thereafter.