Mariner’s €35 million bond issue oversubscribed

Mariner Finance plc’s  €35 million bond issue closed within a few minutes of opening on Monday 23 June 2014, the company announced.

The bond issue was substantially oversubscribed with initial indications that the company received strong support from both retail and institutional investors alike, Mariner said.

The allocation policy will be announced by Monday 30 June 2014. Refunds of unallocated monies will be effected by 7 July 2014.

“We’re very pleased with the response received from our investors and the trust they have shown in our operations and future plans,” said chairman and CEO Marin Hili.

The good show of investor interest in the €30 million bond issue from Mariner Finance – the parent company for sea terminal operator Mariner Group – betrayed concerns about the lack of financial audited statements included in its prospectus, with 2013 figures having only been “illustrative” and “hypothetical”.

Marin Hili’s Mariner Group operates two container terminals in Latvia, with the SE Baltic Sea Terminal in Riga dubbed the “largest and fastest growing terminal” in the Baltic States.

The Mariner Finance plc pro forma figures show a €6.8 million profit in 2013

Figures presented in the prospectus were unlike those in the financial statements that Mariner filed with the MFSA: while the prospectus suggested that Mariner Finance registered a €6.8 million profit after tax, its audited financials actually show it has registered €3,625 – not million – profit after tax.

The company, formed back in 2003, did not include any of its audited financial statements in the prospectus. Mariner inserted “highlights” from its 2011, 2012, and 2013 financials. “Given the restructuring of the Group, the historical financial information specific to the issuer is of limited relevance for the purpose of prospective investors making an informed decision as to whether to invest in the bonds,” Mariner said in its prospectus.

Mariner Finance was incorporated in 2003 when it released a €13 million bond, that was then redeemed in 2010.

In 2013, the group paid previous bank loans with new bank refinancing of €26 million to pay for the acquisition of its two Riga sea terminals.

In November 2013, the group underwent a “corporate restructuring exercise”, with Mariner Finance plc finally becoming the parent company of the Mariner Group in May 2014.

The group’s total assets amount to €36 million in plant and equipment, but this includes an intangible €13.2 million entered as “goodwill on acquisition” of the two container terminals.

The unsecured bonds will be used for the refinancing of Mariner’s existing bank borrowings, possible acquisitions of other ports and logistical facilities, as well as corporate funding of the Group.

The Mariner Group plans to expand and grow its container terminal operations through selective acquisitions. Geographical preference of potential targets will include regions serviced by the European port system, such as the UK, the Baltic Sea area and the Mediterranean.

“Since we commenced operation of the Baltic Container Terminal in Riga in 1996, the company has grown to be the largest and fastest-growing container handling facility in the Baltic States,” chairman Marin Hili said.

“We recently expanded our warehousing facilities to over 20,000 square metres, and plan to double them over the coming years. Further investment will go towards the acquisition of a new ship-to-shore quay crane, which will be commissioned later on this year, as well as increasing the terminal’s overall handling capacity,” Hili said.

The bonds are being issued at an interest rate of 5.3% payable annually, at an issue price of €100 per bond, and will be redeemed in 2024.