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12 March 07
ANOTHER major mining service provider is going public, with The MAC Services Group opening its share offer to raise up to $73.5 million on March 14.
Over the past decade, the Maloney family has built The MAC into one of the leading mining accommodation and catering providers in Queensland's Bowen Basin region.
With the rapid expansion the company has undergone in the past three years and the promise of much more expansion to come, the Maloney family, which owns The MAC through Marley Holdings, has decided to float up to 40% of the company.
According to The MAC prospectus, which was lodged with the Australian Securities and Investments Commission last week, the offer of 43-49 million shares at $1.50 a share opens on March 14 and is scheduled to close on April 2.
If all goes to plan, The MAC could be trading on the Australian Stock Exchange from April 17.
Proceeds from the offer will be used to retire debt, repay loans from the Maloney family, pay for the offer costs and provide working capital. Of that $73.5 million, $64.5 million is fully underwritten.
While The MAC is focused on the Bowen Basin, it has plans to expand its reach, with Western Australia being a key target market.
The MAC offer is split into three parts, with the broker and institutional offer of 40 million shares being fully underwritten by Ord Minnett and Tollhurst Noall.
There is also a priority offer of 9 million shares to companies and clients who have followed The MAC over the years. The first tranche of 3 million shares will also be fully underwritten but a second tranche of 6 million will not.
The MAC company secretary Stephen Law explained the priority offer was another way of reducing the amount of the company the Maloney family will own after the float.
"When we were doing the capital structure, the brokers were concerned that their institutional investors would be worried about the amount of the company the Maloney family would have held," he said.
At that stage, The MAC offer would have raised about $60 million and the Maloney family would have held about 65%. Under the new structure, that falls to 60.5% if the full 9 million shares from the priority offer are taken up.
Law said the expansion the company had gone through over the past three years had been funded solely through debt.
According to the prospectus – based on the broker firm and institutional offer, $30 million will go towards repaying bank debt, $20 million to the repayment of shareholder associated debt, $3 million for paying offer expenses, $7 million to additional working capital and $4.5 million to Marley Holdings.
The proceeds from the priority offer will also go to Marley.
The MAC is focused on providing large-scale integrated mining accommodation facilities.
The company takes responsibility for finding and buying sites; organising development and zoning approvals; project management of construction and development; manufacturing and installing buildings; managing guests' reservations; providing meals; maintaining facilities; servicing rooms; laundry services; and providing entertainment activities.
Its clients include the BHP Billiton Mitsubishi Alliance, Macarthur Coal, Leighton Contractors, G&S Engineering Services, Thiess, Transfield Services and United Group Resources.
Directors of The Mac will include The MAC founder Kevin Maloney (executive chairman and managing director) and non-executive directors Geoffrey Lord, John Taylor, Mark Maloney and Darce Corsie.