The Mediterranean Maritime Hub (MMH) will be seeking alternative financing for the redemption of a €15 million bond issue, due to be repaid in 2026.

This was stated in the half yearly (H1) report by Mediterranean Maritime Hub Finance plc (MMHF), the financial arm of MMH.

MMH Group provides offshore and shore-based logistics to the marine and oil and gas industries, as well as technical services, supply chain management and human resources to support the same industries.

The Directors’ report notes that financing for repayment, due in two years’ time, has not yet been contracted or concluded, according to the business plan prepared by the management.

MMHF had issued the fully subscribed bonds to the public in 2016 which were then redistributed to two companies within the group to finance the development of a 170,000-metre squared site, formerly known as the Marsa Ship Building site.

The site was intended to serve as a regional hub for the provision of the group’s shore-based services and facilities within its industry.  

Just last July, the proposed buyout of MMH by Virtu Holdings Limited and LTV Developments Ltd fell through.

This was also referenced in the report, noting that at the time, MMH Holdings limited, the Guarantor and owner of the shipbuilding site, was planning on referring to the authorities to evaluate the current and future capital investment to maximise the use, output, and flexibility of MMH.

This was done to ensure that the guarantor is in a position to continue honour its commitments as and when they fall due. 

In similar instances, companies sometimes opt for roll over bonds, however it is still unclear whether this is a possible option for the group.

The report also detailed a pre-tax profit of €7,453 for MMHF, during the six-month period that ended on 30th June 2024. This marks a decline from €12,198 in 2023.

During the first six months of 2024, the Group registered a 35 per cent increase in its operating profit, rising to €3.7 million in 2024 from €2.8 million in 2023. Overall, H1 revenue amounted to €8.9 million.

In its financial breakdown, the company also recognised that the key risk and uncertainty of its business is that of the potential non-fulfilment to repay the advances made to its related group members. 

“Due to the borrowers’ operations, this risk is impacted by the performance of the marine and oil and gas industry,” the report stated.

The group’s business plan for the years ending 31st December 2024-2028 sets out a number of measures through which the management is proposing to “optimise site utilisation and increase profitability.” In addition, it aims to improve the group’s management structure, controls, and other internal processes over the short and medium term.

Cashflow forecast indicate that sufficient cash will be generated through H1 of 2024 and in a manner consistent with 2023 and therefore it is expecting to generate a positive cashflow throughout the year.

“The group’s strong efforts in diversifying its revenue streams yielded results in 2023 and this trend continued during the first six months of 2024,” the report shared.