24 January 2022

SRT Marine Systems plc – New Contract & MTN Issuance – January 2022

SRT Marine Systems plc (“SRT”) has announced the award of a new project worth £40m, leading to the issuance of £900k of notes under its recently enlarged £20m Medium Term Note (“MTN”) programme arranged by LGB Capital Markets (“LGB”). SRT has now issued a total of £11.5m of notes under its £20m MTN programme, of which £6.2m remain outstanding. 

SRT (AIM: SRT) is the global leader in the next generation of maritime surveillance. The company provides products and integrated systems that enhance maritime security, safety and management. Its customers include national coast guard and fishery agencies, such as The Bahrain Coast Guard and Philippine Fisheries Ministry, as well as individual commercial and leisure vessel owners and operators worldwide.

On 5 January 2022 SRT received formal written notice of award for a new SRT-MDA™ System project with a national coast guard. The award is for the first of three phases of a project worth a total of £40m. The phases are scheduled to be implemented one after the other, over a total period of two years. The project will require the delivery, installation, commissioning, and support of a national scale SRT-MDA™ System. It will enable the national authority to track, monitor and manage all maritime activity of any size and type in their territorial waters and exclusive economic zone in real time from multiple command centres across the country.

CEO Simon Tucker commented that this project marked the first of several substantial contracts in the company’s £550m validated sales pipeline that had been delayed due to Covid.  During the pandemic, SRT has worked closely with LGB to ensure it has access to appropriate funding to fulfil projects as they arise. Preparations started in mid-2021 when LGB arranged an increase to SRT’s MTN programme from £10m to £20m (click here to read about that programme amendment) to increase note issuance capacity in readiness for new projects.

The MTN facility enables SRT to access funding quickly and deliver the initial phases of projects. Given the uncertainties caused by Covid, it is beneficial that MTN programmes do not incur interest or commitment fees until the funding is actually required.

Upon indication this latest project was going to be awarded, SRT swiftly engaged LGB to raise £900k via the MTN programme to provide a short term working capital bridge for an initial project guarantee. LGB immediately approached a number of its investors and had funds on account ready to be transferred to SRT within three days. This demonstrates the benefit of having an existing MTN programme and mechanism in place to tap the private credit markets as and when required.

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