MedservRegis, the integrated logistics specialist primarily servicing the energy (oil and gas) and mining sectors, has announced that it will hold an extraordinary general meeting (EGM) for the purpose of requesting shareholders to approve the reduction of the share premium account with a view of offsetting accumulated losses at company level which, as at the end of 2022, amounted to €28.6 million.

In a shareholder circular issued by MedservRegis, the company explained that reducing the share premium account increases its flexibility to pay dividends.

As at 31st December 2022, the company’s share premium account stood at €39.8 million. After the reduction of the share premium account in the amount of the accumulated losses, the share premium account would be reduced to €11.1 million.

MedservRegis is also proposing transferring €2.1 million from the share premium account to a separate reserve meant to offset any future losses.

“The share premium account is a non-distributable reserve and the company is therefore unable to use the amount standing to the credit of this account for the purpose of, among other things, making distributions to shareholders,” it said in the circular.

The last time Medserv paid a dividend was in 2015 when the company had distributed a record cash dividend of €2 million.

MedservRegis emerged in 2021 following a share-for-share exchange with Regis Holdings Limited. This resulted in Medserv plc owning 100 per cent of the share capital and voting rights in Regis, followed by the effective merger of the two companies.

Between 2017 and 2020 (prior to the merger with Regis), Medserv recorded aggregate losses of €27.7 million. In contrast, MedservRegis registered a profit of €0.5 million in 2022.

Speaking to WhosWho.mt, an executive representative of the MedservRegis acknowledged that the company had navigated a series of challenges which “unfortunately led to a significant deterioration of the results.”

However, since June 2021, the new management team initiated “a meticulous review and evaluation of our revenue streams and cost structures,” they said.

“Various measures were initiated, including efforts to enhance revenues and streamline costs, but also reducing our overall debt burden and renegotiating the financing terms in order to further reduce our interest costs. These measures started to bear results in 2022, marking the year with a modest yet encouraging profit.”

Moving forward, the equity restructuring being proposed aims to re-establish a positive position for the company’s retained earnings, thereby “creating a foundation upon which we can consider future dividend payments.”

The representative assured shareholders and other stakeholders that although several conditions still need to be met before MedservRegis can resume dividend payouts, “our management is actively working towards fulfilling these prerequisites.”

“We're optimistic about the direction in which MedservRegis is headed and value the interest and trust our stakeholders have in us.”

In light of this, the Board of Directors of the Company is unanimously recommending that the shareholders vote in favour of the reduction of the share premium account as above described to offset losses incurred by the company.

The EGM will take place on 16th November at 10am, at the Carlson Suite, Radisson Blu Resort, St George’s Bay, St Julian’s.