Monitoring bond issuer developments (5)
In the oil and gas sector, there are two companies that have bonds listed on the Malta Stock Exchange – Medserv plc and Mediterranean Maritime Hub Finance plc.
Medserv plc has been well known among the investment community for several years as a result of the initial public offering (IPO) of its shares in October 2006 followed by a debt issuance programme in 2013 as well as a rights issue together with another bond issue in December 2015. Meanwhile, Mediterranean Maritime Hub Finance plc only tapped the market on one occasion with a €15 million bond issue in September 2016.
Medserv’s financial performance and its credit metrics have been rather erratic in recent years as a result of the volatile conditions in the oil and gas sector and the subsequent delay in drilling activity in various locations in which the Medserv group is active. In 2015, Medserv had reported revenues of €42.7 million, an Ebitda of €10.2 million and a pre-tax profit of €5.8 million. At the time, the Medserv group had a strong interest cover of 6.8 times and a net debt to Ebitda multiple of only 2.5 times.
In the early part of 2016, Medserv increased its borrowings to partly fund the acquisition of the METS...