Melita Capital Plc Presentation 25 th August2009 25 th August 2009
Introductions–Panel Introductions –Panel Joe Gasan Sebastian Sipp b i i • Chairman of Melita Capital • Principal at GMT Communications Partners LLP. • Chairman of the Gasan Group • Involved in the management of GMT portfolio • Co ‐ founder of Melita in 1992 companies • Prior experience in cable operations P i i i bl ti Gary Quin Vincent E Rizzo • Director of Rizzo Farrugia Director of Rizzo Farrugia • Director of Melita Capital and CEO of Blackrock • Director of Melita Capital and CEO of Blackrock Communications Charles Borg • Extensive experience from the roll ‐ out of international mobile operations • Chief Officer, Financial Markets, Bank of Valletta • Significant capital market experience In attendance: Stephen Wright – CEO ‐ Melita Andrei Torriani – COO ‐ Head of Melita Mobile Michael Maltby – CFO ‐ Melita Michael Maltby – CFO ‐ Melita 2
WhyMelita Capital? Why Melita Capital? Over €50m has already been invested in Melita Mobile and Melita Over €50m has already been invested in Melita Mobile and Melita • Infrastructure – our submarine cable company The terms of the 2007 leveraged buyout of Melita Cable restrict • changes in the company’s capital structure As a result Melita Capital has been established as the new • financing/holding company of the new business of Melita financing/holding company of the new business of Melita Bondholders will be investing in a major Maltese brand, whose • value has been recognised and backed by successful international a ue as bee ecog sed a d bac ed by success u te at o a investors They will be directly expanding Malta’s national infrastructure • which in turn will facilitate further foreign direct investment as well as providing value and infotainment to Malta’s citizens 3
ExecutiveSummary Executive Summary Melita Capital intends to raise up to €30m through a 7 year Melita Capital intends to raise up to €30m through a 7 year • unsecured bond issue on the Alternative Companies List of the Malta Stock Exchange – subject to final MFSA approval Melita Capital owns 100% of Melita Infrastructure and 30% of • Melita Mobile More than sufficient funds to meet interest payments through More than sufficient funds to meet interest payments through • • Melita Infrastructure Sufficient funds to meet sinking fund requirements Su c e t u ds to eet s g u d equ e e ts • Opportunity to invest in one of Malta’s best known brands • The bond will finance one of Malta’s fastest growing companies • backed by the strong, stable cash flows associated with an infrastructural investment 4
Useof Proceeds Use of Proceeds • €7.5m loan to Melita Infrastructure refinancing project funding • €17 ‐ 22m loan to Melita Mobile refinancing project funding and facilitating future financing needs • Leading local bank will continue to provide funding support to the Melita Capital group suppo o e e a ap a g oup 5
MelitaSuccessStory Melita Success Story Melita launched its Cable TV services in June 1992 providing • home entertainment to virtually all homes across Malta and Gozo Today the leading entertainment provider in Malta Today the leading entertainment provider in Malta • • – #1 Television provider with approximately 100,000 subscribers – #1 Broadband provider with the country’s fastest broadband #1 Broadband provider with the country s fastest broadband service (50Mbps) – #2 Fixed ‐ line telephony provider (launched two years ago) p y p ( y g ) Melita Capital will provide Melita’s next stage of growth through • – Funding the third generation (3G) mobile network rollout – Operating Melita’s newly constructed Submarine Cable 6
MelitaCapital Plc Melita Capital Plc Melita Capital owns 100% of Melita Infrastructure 30% of Melita Mobile Melita Capital owns 100% of Melita Infrastructure, 30% of Melita Mobile • • and a pledge on the remaining 70% of Melita Mobile (held by Melita Plc) The main purpose of the bond is to finance the growth of Melita Mobile, • Malta’s fastest growing mobile operator – This will involve a mixture of subscriber acquisition costs and further capital expenditure to meet the demands of an increasing subscriber capital expenditure to meet the demands of an increasing subscriber base Melita Capital also owns Melita Infrastructure • – The recently completed submarine cable company connecting Malta with Sicily – Highly cash generative with excellent margins Highly cash generative with excellent margins – Set to win significant contracts connecting the Island’s institutions to high speed internet hubs in Europe 7
TheMelitaGroup The Melita Group The Sponsors (1) 100% 100% 100% Honey Group Melita Capital plc 100% 100% Melita Plc Melita Melita Infrastructure 30% 70% Melita Mobile (1) The Sponsors are GMT Communications Partners MC Venture Partners Gasan and Blackrock Communications (1) The Sponsors are GMT Communications Partners, MC Venture Partners, Gasan and Blackrock Communications 8
Melita Shareholders MelitaShareholders GMT ‐ GMT Communications Partners is a leading private equity firm focusing on investments in the GMT GMT C i ti P t i l di i t it fi f i i t t i th • European communications industry. GMT has established three funds since its launch in 1993 and has since made 28 investments across 18 countries. GMT has organised syndicated portfolio financings ‐ including equity and debt ‐ with a total value in excess of €3.5 billion. MC ‐ M/C Venture Partners is a venture capital firm focused exclusively on the communications, media • and information technology sectors. Since inception M/C Venture Partners has invested over 1.8 billion US Dollars in almost 100 emerging companies of all stages of growth. The firm’s current investment vehicle, M/C Venture Partners VI, is a US$550 million fund. Gasan Group ‐ Besides its interest in the Melita Group, the Gasan Group holds a diversified portfolio of • other assets, including shares in property development companies and listed securities. The Gasan Group is also engaged in the operation of motor vehicle dealerships and related services, the provision of insurance services, the holding and renting of property as well as the provision of electrical and mechanical engineering contracting services, lifts and air conditioners. Blackrock Communications ‐ Blackrock Communications is a private equity vehicle focused on • telecommunications opportunities , with a sectoral bias towards mobile opportunities. Blackrock’s principals have been involved in over 30 mobile launches and have raised over $3bn in bonds related to p p $ these operators. 9
MelitaInfrastructure Melita Infrastructure The Sponsors laid a Submarine Cable between • Malta and Sicily to provide international bandwidth to Melita’s Internet and Telephony customers Investment rationale to develop Melita • Infrastructure include – High margin business with attractive growth profile – Avoid dependency on competitors for Avoid dependency on competitors for international bandwidth supply Melita Infrastructure is able to provide secure, • high speed access to Maltese institutions including Melita plc 10
MelitaInfrastructure–FutureProofNetwork Melita Infrastructure –Future Proof Network Secure, growing cash flow profile generated predominantly from Melita’s h fl f l d d l f l ’ • internet customers – Melita ranks #1 as Internet provider with >50% market share p – Provider of the fastest internet product on Maltese Islands Fiber optic network technology future proof with bidirectional capacity of • 320GB/s available between European mainland and Malta 320G / il bl b i l d d l – Melita plc projects bandwidth requirement of 26 GB/s by 2015 – Ample capacity remaining to serve Maltese institutional and corporate Ample capacity remaining to serve Maltese institutional and corporate customers NEWS: The Group just won a tender from the University of Malta to • provide it with next generation connectivity id i i h i i i – Project value of €1.5m 11
MelitaInfrastructure–BusinessPlan Melita Infrastructure –Business Plan IP connectivity / bandwidth generate revenues of €3.3m in 2010, with an • expected growth rate over the next 3 year of a CAGR of 33% Highly cash generative, achieving EBITDA margins in excess of 45% Highly cash generative, achieving EBITDA margins in excess of 45% • Bandwidth consumption expected to increase rapidly as: • – The Melita subscriber base grows (more broadband and mobile subs) – Increasing bandwidth consumption (+50Mbps) Significant Revenue upside achievable providing secure, premium • bandwidth (IP transit) products and hosting solutions to Maltese bandwidth (IP transit) products and hosting solutions to Maltese institutions – Additional business not reflected in Melita Capital’s business plans Melita Infrastructure’s cash flows will service the bond interest • 12
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