Trasporti
Announcement of Intention to Float on the Dubai Financial Market
Established in 1998 as a road transport service provider for the petroleum industry in the UAE, Tristar has evolved into a leading integrated energy logistics company serving a diversified customer base of "blue-chip" investment grade companies. The Group has operations in 21 countries and territories across three continents and has over 2,000 road transport assets and 35 maritime vessels, including the operation of 69 fuel farms and over 100 remote fuel sites, providing a wide spectrum of integrated service offerings.
With a strong reputation for quality, built over two decades of operations and a commitment to safety and operational excellence, Tristar has become a trusted brand in the global logistics industry. The Group is a partner of choice for leading International Oil Companies ("IOCs") and National Oil Companies ("NOCs") in the energy sector. Tristar's diversified and integrated offering spans fuel logistics services to support Intergovernmental Organisations ("IGO") peacekeeping and humanitarian missions in remote geographies (remote fuels) as well as commercial enterprises (commercial fuels), maritime logistics, road transport and warehousing as well as fuel farms. Tristar has a unique position as an integrated, end-to-end energy logistics solution provider to an enviable blue-chip global client base.
The Group has a strong track record of growth demonstrated by a 12.4% CAGR in operating cash flows between 2018 and 2020 and a consistent EBITDA margin between 20.1% to 22.8% in the years 2018 to 2020. In the year ended 31 December 2020 , the Group had a consolidated revenue of $453.4 million , and EBITDA of $103.6 million . This record is underpinned by a strong business model, operational excellence and rigorous financial management.
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If all of the Offer Shares are allocated, the Offer Shares will represent up to 24% of the Shares.
The Offering will comprise a primary issuance of 199,000,000 New Shares in addition to a secondary offering of up to 88,760,000 Existing Shares by the existing shareholders.
The Existing Shares are being offered by Agility Tristar SPV Ltd (of which Agility Public Warehousing Company K.S.C.P. is the sole ultimate beneficial owner), Star Holdings Ltd (of which Gulf Investment Corporation is the sole ultimate beneficial owner), and Diamond SPV Limited (of which Mr. Eugene Mayne is the sole ultimate beneficial owner) (the "Selling Shareholders"), who currently own 65.12%, 19.61%, and 15.27% of the Shares of the Company respectively.
The Offering comprises an offering of the Offer Shares to qualified investors in the United Arab Emirates and in a number of jurisdictions.
The Offering is expected to be allocated to certain types of juridical persons and high net worth individuals and who are qualified investors as defined by SCA , with a minimum application size of AED 500,000 (for further details please see the FAQs set out in Tristar's IPO website – https://ipo.tristar-group.co).
In addition, the EIA has the right to subscribe for 5% of the Offer Shares in accordance with the requirements of article 127 of the UAE Federal Law No. 2 for the year 2015 with regard to commercial companies, and its amendments. If the EIA does not exercise its preferential rights to apply for Offer Shares, then those Offer Shares will be made available.
The completion of the Offering is currently expected to take place in April 2021 , subject to market conditions and obtaining relevant regulatory approvals in the UAE, including from the SCA. Furthermore, the Offering is expected to be declared Sharia compliant, subject to confirmation by the Sharia Supervision Committee, on the date of the receipt of the net proceeds of the Offering and upon the use of the proceeds to repay around AED 197 million in loans and payables due to related parties.
A syndicate of banks has been appointed for the Offering comprising BofA Securities and Citigroup Global Markets Limited as Joint Global Coordinators and Joint Bookrunners, First Abu Dhabi Bank PJSC as Joint Regional Coordinator, Lead Manager and Joint Bookrunner, HSBC Bank Middle East Limited as Joint Regional Coordinator and Joint Bookrunner, Société Générale as Joint Bookrunner and Kuwait Financial Centre K.P.S.C. ("Markaz") as Co-Lead Manager. BofA Securities, Citigroup Global Markets Limited, First Abu Dhabi Bank PJSC, HSBC Bank Middle East Limited, Société Générale and Markaz are herein referred to as "Managers". Moelis & Company is acting as Independent Financial Advisor to Tristar.
Tristar is an integrated energy logistics solutions provider. Its services include fuels (remote fuels and commercial fuels), maritime logistics, road transport and warehousing and fuel farms. The Group is headquartered in Dubai (UAE) and operates in 21 countries and territories across three continents.
With over 2,000 road transport assets and 35 maritime vessels and a wide spectrum of integrated service offerings, including the operation of 69 fuel farms and over 100 remote fuel sites, the Group has built a global and scalable platform, which enables it to provide an integrated logistics offering to the energy industry.
Tristar has a differentiated investment proposition as a leading integrated liquid logistics solutions provider to the energy industry globally. The Group's competitive strengths include:
The Group developed a business model which places its customers at the centre of what it does and a strategy with multiple growth opportunities arising from: intrinsic organic growth from the Group's existing assets; in-market expansion from the launch and ramp-up of newly signed contracts; and the potential to expand existing capabilities and into adjacent areas as well as consolidation through mergers and acquisitions. The execution of the Group's strategy relies on the following principles:
The number of primary shares offered in the Offering is expected to be fixed, as required by the SCA. As such, the amount of primary proceeds to be received by Tristar will depend on the final offer price and is expected to be in the range of $120 to 160 million. The Group is targeting a reduction in the ratio of consolidated net debt to EBITDA (as at 31 December 2020) to approximately 2.2-2.5x as compared to the reported 3.5x.
The Company undertakes to repay AED197 million in loans and payables due to related parties on the date of the receipt of the net proceeds of the Offering, with the balance of the net proceeds used for general corporate purposes including the funding of planned capital expenditure.
The Group intends to maintain a conservative capital structure with medium term target leverage of 2.0-2.5x while retaining flexibility to execute on sustainable growth opportunities as they arise. The majority of the Group's indebtedness is targeted to remain asset-backed financing secured against maritime vessels with back-to-back contracts and limited recourse to the Group.
For the dividend declared with respect to the year ending 31 December 2020 , Tristar paid $29.6 million to the Selling Shareholders, $10 million as an ordinary dividend for the year ending 31 December 2020 , and the rest as special pre-IPO dividend.
The Selling Shareholders will pay all offering expenses (estimated to be $19.6 million ), of the IPO.
For the dividend to be declared with respect to the year ending 31 December 2021 , Tristar targets a pay-out ratio of 60-70% of net income. Tristar intends to pay $12.5 million dividend in the third quarter of 2021 as an interim dividend, with the remainder expected to be paid in the second quarter of 2022 as a final dividend. Thereafter, Tristar intends for dividends to be paid on a yearly basis at a pay-out ratio of up to 60% of net income.
As a responsible business, Tristar has adopted the Environmental, Social and Governance ("ESG") framework for a holistic and long-term sustainability approach to its business in line with its mission to be a
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Operating in 21 countries including conflict zones, in its daily operations the Group cultivates and reinforces the Ten Principles of the United Nations Global Compact (the "UNGC") which focus on human rights, labour, environment and anti-corruption. In line with these principles, the Group takes an active approach to address social issues including access to education, clean water and good health in the communities where it operates, since becoming a signatory of the UNGC in 2011.
As a participant and board member of the Global Compact Local Network UAE, the Group actively engages and encourages its stakeholders to adopt sustainable business practices.
Tristar's commitment to sustainability is publicly disclosed to its stakeholders through its annual Sustainability Reports published since 2012. As part of its sustainability strategy and ESG initiatives, the Group recognises its responsibility to protect the environment and to reduce its carbon footprint through the adoption of latest technology, resource efficiency and the use of renewable energy.
The Group strives to engage with local communities and foster a relationship of trust and collaboration to work towards the advancement of the United Nations Sustainable Development Goals ("United Nations SDGs"). The Group supports the United Nations SDGs through the adoption of local projects and the engagement of employee-volunteers in order to address community needs in the 21 countries and territories in which it operates.
Additionally, in 2019, the Group signed the Women Empowerment Principles by reaffirming its commitment towards diversity and Gender Equality.
The Group has established a framework of corporate governance policies, rules and practices which comply with the requirements of the Code of Governance issued by Decree of the Ministry of Economy No. 518 of 2009 and the Chairman of Board of Directors of SCA Decision No. 3 of 2020 concerning the Approval of Joint Stock Companies Governance Guide and take into consideration international best practices as appropriate.
The Board of Directors (the "Board") will consist of seven members and is vested with the power to manage Tristar and conduct its business in accordance with the Federal Law No. 2 of 2015 concerning commercial companies of the UAE as amended. The Board will comprise six non-Executive directors and one Executive Director, and four of its members are independent non-Executive directors. An elected Chairman will preside over the Board. The board members are elected for a term of three years and will meet at least every three months.
There are currently two permanent Board Committees: the Audit and Risk Committee and the Nomination and Remuneration Committee.
Information on how to subscribe for the IPO can be found on Tristar's IPO website (https://ipo.tristar-group.co).
Notice to Prospective Investors in the Kingdom of Saudi Arabia :
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