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PRYSMIAN GROUP | DIRECTORS’ REPORT
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On 9 November, Prysmian Cables y Sistemas de Mexico, announced it would be building a new
telecom
cable manufacturing facility
in Durango, Mexico, with the aim of strengthening its competitive position and
benefiting from the growing optical fibre cable market in Mexico and Central America. The project involves an
initial investment of around USD 10.5 million in machinery and buildings, and a maximum capacity of
2,000,000 fkm per year. Phase one of the project will be completed in 2016, with a production capacity of 1
million fkm per year. Phase two will be completed in 2017, bringing overall production capacity to 2,000,000
fkm per year.
FINANCE AND M&A ACTIVITIES
Bond issuance
On 10 March 2015, the Board of Directors of Prysmian S.p.A. authorised management to proceed,
depending on prevailing market conditions and in any case by 30 June 2016, with the issuance and private
or public placement of bonds in one or more tranches. These bonds were intended for sale to institutional
investors only.
Consequently, on 30 March 2015 Prysmian S.p.A. completed the placement with institutional investors of an
unrated bond, on the Eurobond market, for a total nominal value of Euro 750 million. The bond, with an issue
price of Euro 99.002, has a 7-year maturity and will pay a fixed annual coupon of 2.50%.
The bond settlement date was 9 April 2015. The bond has been admitted to the Luxembourg Stock
Exchange and is traded on the related regulated market.
Prysmian has used the bond issue proceeds to redeem the Euro 400 million Eurobond that matured on 9
April 2015 and to repay early the Term Loan Facility 2011 for Euro 400 million.
Acquisition of Gulf Coast Downhole Technologies (GCDT)
Prysmian Group signed an agreement on 24 September 2015 to acquire 100% of Gulf Coast Downhole
Technologies (GCDT), a privately-owned US company, for an initial consideration, subject to adjustment, of
approximately USD 45 million. There is also an earn-out determined on an average combined EBITDA in the
next three years, with the maximum pay-out capped at about USD 21 million.
Based in Houston, GCDT is active in the design and supply of innovative downhole equipment for the Oil &
Gas industry, with turnover of approximately USD 34 million in 2014. GCDT products are installed in oil and
gas wells around the world and consist of integral components in the systems that provide downhole control,
injection, flow assurance and monitoring. GCDT's customer base covers a wide range of oil and gas field
service companies; GCDT products are installed in facilities operated around the globe by major oil and gas
producers like Chevron, ExxonMobil and Shell.
GCDT is a perfect fit for the Group's expansion strategy in the business of Subsea Umbilicals, Risers and
Flowlines (SURF) and complements its Draka-branded DHT product range.
The closing transaction was completed on 1 October 2015, meaning that the accounting effects have been
reflected as from that date.