Issue link: https://maltatoday.uberflip.com/i/1361797
2 NEWS 15.4.2021 Medserv announces strategic transaction with Regis Group MAPFRE MSV Life p.l.c. 2020 Pre-Tax Profits firm at €15 million THE Medserv Board of Directors have today announced that the Company has entered into an agreement with Regis Holdings Limited to bring the two en- tities together through a share for share exchange. Subject to all the required approvals, the new company shall be known as MedservRegis and will con- tinue to be listed on the Malta Stock Exchange. e transaction with Regis is expected to provide Medserv with market entry into critical growing markets and to strengthen Medserv's equity base and liquidity position. Regis provides logistics, equipment, procurement and specialised services to a wide range of customers, including national and international oil compa- nies, oilfield services, drilling and min- ing companies as well as product and equipment manufacturers and other heavy industry-related contractors in South Africa, Mozambique, Uganda, Tanzania, and Angola, a critical growth region for Medserv. e global reach of the new Group, MedservRegis, will span across four continents, present in twelve countries and operating from ten bases. is con- solidation of two similar groups operat- ing in two different geographical mar- kets will strengthen the new Group's market position and broaden its geo- graphic footprint in strategic locations around the Mediterranean region, Mid- dle East, Sub-Sahara Africa and South America. e synergies created by this transaction will not only present a stronger financed new company capable of meeting the investments required to match the growth expectations but also allow the Company continue to deliver value. "e creation of MedservRegis is a strong response to the business envi- ronment which increasingly demands a new operating model of better col- laboration across the supply chain to provide fully integrated solutions and increased value add." said Anthony Di- acono, Chairman Medserv plc. e transaction is still subject to com- pletion, including all required regula- tory and shareholder approvals which include approval by the shareholders of Medserv plc, delisting of Regis from the Mauritius Stock Exchange and the transfer out of the Regis Group of the non-core businesses. Subject to the sat- isfaction of all conditions, completion of the transaction is expected to take place by the end of June 2021. e Company shall, in due course, is- sue a notice to shareholders for the pur- pose of convening a general meeting to approve the transaction. In anticipation of the said meeting, the Company shall also issue a circular to shareholders including all information necessary in terms of the Listing Rules. MAPFRE MSV Life p.l.c. registered a profit before tax of €15.0 million for the year ended 31 December 2020, up 2.8% on the previous year. Total shareholders' funds amounted to €161.3 million at the close of 2020, reflecting an increase of 9.5% during the year. e newly appointed Chief Executive Officer of MAPFRE MSV Life p.l.c., Etienne Sciberras, said that 2020 had been very challenging for the life insur- ance market in Malta due to the prolon- gation of the low interest rate scenario and the outbreak of the pandemic early in the year. "Demand for With Profits single pre- mium contracts softened on account of a drop in investment returns. is was contrasted by activity in new regular premium and retirement savings prod- ucts, driven by improved fiscal incen- tives within an underlying increase in investor awareness of the importance of saving to support retirement," he said. "We consequently intensified the pro- motion of our Voluntary Occupational Pension Scheme and protection prod- ucts." Sciberras also highlighted the success of efforts to sustain business continuity in 2020 through the reconfiguration of workflows and introduction of efficient remote working capabilities to ensure that the Company remained in a posi- tion to service customers at all times. ese developments were reflected in a 4.7% drop in gross premiums written for financial year 2020, which totalled €269.6 million. At the same time, net claims incurred increased by 24.3% to €261.2 million through the year, largely as a result of a continuing trend of ma- turing medium-term single premium contracts, a large proportion of which were subsequently re-invested into new medium-term contracts. e MAPFRE MSV Life p.l.c.'s total assets increased by 2.7% to €2,563.6 million at the end of 2020, whilst net technical provisions (including invest- ment contracts without DPF) increased by 2.1% to €2,349.3 million. e value of in-force business, which projects fu- ture transfers to shareholders arising from policies in force at the end of the year, increased by 5.0% to €77.2 million in 2020. is is attributable to the im- pact of new business inflows, improved technical margins and improved expec- tation of mortality performance. e MAPFRE MSV With-Profits Fund stood at €2.18 billion at 31 December 2020, up from €2.15 billion in 2019, with growth driven both by operational cash-flows arising from new business as well as market returns on the differing asset classes held within the portfolios. e solvency ratio stood at 188.7% at the end of 2020. e Directors have reviewed the Company's capital needs over the forthcoming medium term within the framework of Solvency II and passed resolutions to increase the authorised share capital of the Com- pany from €60 million to €120 million and the issued share capital from €54.75 million to €94.75 million. e capital increase was effected on the 25 March 2021. Furthermore, in line with EIOPA rec- ommendation of prudence in terms of dividend distributions, the Directors did not recommend the payment of a fi- nal net dividend for financial year 2020. For financial year 2019 the Directors had recommended the payment of a fi- nal net dividend of €11.77 million that was to be paid in April 2020. However, this payment was subse- quently rescinded as part of the imme- diate reaction to the COVID-19 out- break and retained within Company reserves. Looking ahead, Sciberras said that the company would be reinforcing its strong customer focus through contin- uous improvements in business pro- cesses and operations underpinned by digital investment and innovation. "is will build upon the new distri- bution portal for protection business rolled out in 2020 as part of the project that is seeing us implement a new Life Administration System," he said. "is new digital portal is already enabling us to achieve a high percentage of straight through policy issuing at the point of sale." As to the the market, he said that the outlook ws one of cautious optimism despite the deterioration in economic conditions due to the COVID-19 pan- demic. "While general economic recovery will likely need to extend beyond 2021, demand for protection, savings and in- vestment products in Malta is expected to remain strong," Sciberras said.