Green bond issued, contract in oil & gas
Green bond issued, contract in oil & gasSIGNIFICANT NEWS
While the issuance of the green bond confirms the appetite for renewables by the market, the front-end engineering & design contract awarded in oil & gas is re-assuring. In the press release, Dolfines also mentions an order book that has been largely reconstituted in the audit division (Factorig). This supports our view on the recovery of oil & gas services after the trough in 2020.
FACT
Issuance of a €1.5m green bond:
Maturity of two years (January 2023)
Refundable monthly / nominal annual coupon of 12% payable monthly
From July 2021, Dolfines is able to repay bondholders
From July 2021 to December 2022, bondholders are able to convert the bonds into Dolfines’ shares. The conversion price is the VWAP of the 10 trading days preceding the conversion minus a 20% discount
ANALYSIS
Green bond: the issuance follows the EU Green Bond Standard. The standard is based on several components (e.g. alignment of the project with the EU-taxonomy) and is designed to make the issuance of green bonds more uniform as these are having an increasing role in the energy transition. The bond was structured and placed by Capital Système Investissements in a club deal with professional investors.
Oil & Gas: re-assuring update after the dramatic H1 20. Dolfines’ oil & gas services has been awarded a front-end engineering & design contract (FEED) for a drilling rig. This is positive news as, traditionally, engineering contracts are lumpier than maintenance ones. In audit and inspection, Factorig seems well positioned to restart its activities in 2021. Last week, the EIA reported US commercial crude inventories decreasing by 1 million barrels from the previous week. US crude oil inventories are slowly normalising, now c. 4% above the five-year average compared to 9% a month ago. We expect the $55-60/bbl oil price range to incentivise operators to raise their output, supporting drilling activities.
Dietswell. Dietswell SA is a France-based company that provides drilling operation management services for the oil industry. The Company specializes in the design, drilling, work-over and completion engineering. It offers well engineering services, such as well engineering, preparation and evaluation of tenders, offset wells reviews; drilling project management, management of the stock of spare parts, supply of communications and logistic support, among others; drilling contracting; rig design and contracting, which designs, constructs and refurbish rigs; rig inspection and audits, which provide customized inspection and audit services; and provision of technical assistance. Dietswell SA principally provides its services to ageing oilfields that need updating, or that need to be decommissioned in an environmentally friendly manner. The Company holds stakes in two companies: Dolfines Logistique and Feumag Holding Company Limited. In October 2013, it announced the creation of Dietswell Brazil.
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