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IG Finance plc €3,700,000 5.5% Unsecured Bonds 2024-2027 guaranteed by Impresa Limited

IGFINANCEBONDISSUE

IG Finance plc (the “Issuer”/ “Company”) is offering the amount of €3,700,000 5.5% Unsecured Bonds (the “Bonds”) 2024-2027. The Bonds are guaranteed by Impresa Limited. The Bonds shall be admitted to Prospects, the market regulated as a Multilateral Trading Facility operated by the MSE providing a venue for start-up and growth small to medium-sized enterprises to float their capital (including equity or debt) on the market.

If you wish to apply for these bonds see information at the bottom of this article.

BUSINESS OVERVIEW

The Issuer forms part of a group of companies and is a special purpose vehicle set up for the purposes of issuing the Bonds. The Company and is a fully owned subsidiary of the Guarantor.

The group’s main product lines are electronic packaging, injection-moulding subcontracting and cables. The operations of the Group have, to date, been largely divided between the activities listed below:

Electronic packaging – Elepac Limited (“Elepac”) was established to manufacture and warehouse packaging materials and other products. The company manufactures electronic packaging, which includes wafer-packaging systems, reels, trays, carrier tape and canisters. Elepac has been in the business of electronic packaging since 1996, working in the sphere of manufacturing jedec trays, reels and silicon wafer packaging. In 2015, the company expanded its ambit in the manufacturing of carrier tape of IC packaging, which is a rapidly increasing packing medium for finished integrated circuit devices. By virtue of a strategic manufacturing partnership agreement with a world leading manufacturing multinational company, Elepac invested in four (4) machines in 2015, targeting a specified list of codes used by a multinational electronics and semiconductor manufacturer. These product codes were successfully qualified and are being supplied on an ongoing basis.

Injection moulding subcontracting – Since 1990, Elepac has been one of the leading subcontractors of injection moulded toy components. In 2014, the company invested in five single colour and one two-colour injection moulding machines in order to increase productivity.

Cables – Eurosupplies Limited imports electrical cables branded as “JB Plastics” from Turkey. These are then sold in the local market and are also exported to other countries mainly to the Caribbean.

Wafer packaging – In 2009, Meritlink Limited (“Meritlink”) was entrusted to manufacture and distribute the ITW’s wafer packaging system to a specified list of world-class semiconductor companies. In 2009, a license /royalty agreement was signed wherein Meritlink became licensed to use ITW’s IP (intellectual property) thus becoming a direct vendor to the specified list of customers.

USE OF PROCEEDS

The amount of €3,700,000 shall be utilised as per the below:

A. An amount of €3,350,000 shall be advanced, pursuant to a loan agreement, to Elepac Limited in connection with the Group’s planned investment. In turn, these funds will be utilised in Elepac as follows:

i. €1,200,000 shall be used for investment in new machinery;

ii. €1,750,000 shall be used to fund existing and increased working capital and trade finance requirements; and

iii. €400,000 to refinance an existing bank loan with Banif Bank;

B. An amount of €350,000 shall be advanced pursuant to a loan agreement, to Eurosupplies Limited for existing and increased working capital and trade finance requirements.

FUTURE INVESTMENTS

The Group is planning to expand its operation in its current core business under three pillars as described below:

A. Investment in carrier tape

Phase One:

After being in the field of electronic packaging since 1996, manufacturing jedec trays, reels and silicon wafer packaging, Elepac commenced the manufacture of Carrier Tape for IC packaging in 2015. Carrier tape is a rapidly increasing packing medium for finished integrated circuit devices. Under a SMP (Strategic Manufacturing Partnership) agreement with a world leading manufacturing multinational company, as a first phase in 2015, Elepac invested in four (4) machines targeting a specified list of codes used by the Malta site of a multinational electronica and manufacturing company. These product codes were successfully qualified and are being supplied on an ongoing basis. Based on the success of this first phase, Elepac is looking to move to the second phase to enhance its technical capabilities with other technologies to enable the manufacture of the other product codes which cannot be produced with the current technology, and to increase its capacity substantially for increased revenue. Furthermore, a multinational electronics and semiconductor manufacturer is actively requesting the setting up of proximity manufacture of carrier tape through SMP Elepac. Qualification of carrier tapes for the Moroccan site is presently underway through samples produced in the overseas site, with a plan to transfer technology to Malta thereafter. The introduction of another two different process technologies, Elepac will be well placed to produce all designs used in the industry to date not just for the present customer but also for other fabrication companies who have also expressed interest in manufacture in Europe. In line with the above, Elepac plans to proceed to the next phase and implement the investment in two sub-phases:

Phase two:

First Segment

Investment in one machine in rotary technology: This is identified to be the best technology for the Group’s customer’s requirement in Malta producing carrier tape to within the required tight tolerance. The machine type is a single lane machine after consideration was given to the volumes required of each code.

Investment in one machine of multi-lane linear technology: This technology has been selected for the customer’s requirements in the Moroccan site in view of the tape designs and the high productively required to meet high volumes albeit on a fewer number of codes. This can also serve as a contingency for products produced in rotary technology.

Second Segment

Investment in another two multilane linear machines

A three-year roadmap has been agreed with the customer which involves stepping up capacity from the current output of 4,000Kms /PA to 12,000 Kms p.a. with progressive increase in market share. Additional business is also expected through trading of the cover tape that seals the carrier tape after device placement in the tape pockets.

B. Subcontracting

Since 1990, Elepac has been one of the leading subcontractors of injection moulded toy components. In 2014, Elepac invested in five single colour and one 2-colour injection moulding machines. Elepac is looking to enhance its position by investing in a two and/or potentially three -colour injection moulding. The objectives of the investment are:

i. To increase capacity and revenue, in 2 / 3- colour moulding;

ii. To reduce energy cost of manufacture; and

iii. To reduce manufacturing costs through lower maintenance costs and higher throughput.

Through this plan, the overall capacity is expected to increase by around 20%. Moreover, the capacity increase is in the 2/3 colour sector which is in-line with the customer’s vision on technology moving forward. This investment is expected to be carried out over a twelve-month period. However, taking a conservative approach, the Group has based its projections on capacity increase over three years.

C. Wafer packaging

In 2009, Meritlink was engaged to manufacture and distribute the ITW’s wafer packaging system to a specified list of world class semiconductor companies. Wafer packaging required specialized manufacturing and stringent quality practices. Although the relation with ITW started as a subcontracting relationship, in 2009, a license /royalty agreement was signed wherein Meritlink became licensed to use ITW’s IP (intellectual property) thus becoming a direct vendor to the specified list of customers. By this investment plan, management envisages the Group’s turnover to increase by €490,000 which is around 35% from 2015. Moreover, the investment will also provide additional capacity to enable the Group to tap other opportunities in this niche sector.

HOW TO REGISTER TO BUY BONDS?

Orders may be placed by contacting us on 25 688 688 or via email on [email protected].

Orders will be accepted from the 11th April 2017. The application form must be submitted by not later than the 15th May 2017 at 1200hrs.

Applications must be for a minimum value of €2,000 and multiples of €1000.

A copy of the prospectus is available HERE

The Issuer has also set up a website with URL www.igfinance.com.mt which includes an “Investor Information” section from which investors can obtain current information on the Company. This section shall include all electronic communication for all information required to be disclosed under the Prospects Rules and / or applicable law to all holders of admitted securities.

Calamatta Cuschieri Investment Services Ltd is acting as a Placement Agent and Manager for this bond issue.