JZ Capital Ptnrs Ltd Update on Liquidity Plan for JZCP
October 02 2019 - 2:00AM
UK Regulatory
TIDMJZCP TIDMJZCN
NOT FOR RELEASE OR DISTRIBUTION IN OR INTO THE UNITED STATES.
JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP")
(a closed-end collective investment scheme incorporated with limited liability
under the laws of Guernsey with registered number 48761)
LEI: 549300TZCK08Q16HHU44
Update on Liquidity Plan for JZCP
2 October 2019
Following the announcement on 8 May 2019, the Board of Directors of JZCP
announces that it is planning to convene an extraordinary general meeting of
the Company to approve a revised investment policy. In line with this previous
announcement, the Board is seeking to enshrine a strategy to look to realise
investments, pay down debt and materially reduce commitments to new
investments, such that capital may be returned to shareholders.
The Board is pleased to report on the progress made in implementing this plan
to generate liquidity for JZCP. On 29 August 2019, the Company completed its
first tender offer for approximately $30 million, part of the previously
announced plan to return approximately $100 million in capital to shareholders.
Subject to timing of upcoming realisations, the Company expects to return the
balance of approximately $70 million to shareholders via a series of tender
offers, special dividends or opportunistic market buybacks over the next 12-15
months.
Shortly prior to the close of the first tender offer, JZCP finalized the sale
of 80% of its interest in portfolio companies Orizon and Avante, 34% above NAV,
for $65.5 million in gross proceeds received by the Company. This transaction
brings total gross proceeds realised during the first six months of the fiscal
year to more than $120 million.
The Board has now decided on a more ambitious plan than previously announced,
being a plan to raise approximately $400-500 million in liquidity by the end of
the Company's fiscal year ending February 2023. This plan is intended to enable
JZCP to pay down a substantial amount of debt and return a substantial amount
of capital to shareholders while also meeting the capital requirements of the
portfolio in order to achieve NAV growth.
JZCP's plan calls for raising liquidity from realisations, secondary sales of
certain asset portfolios, joint venture partnerships and the previously
announced US Side-Car Fund. Notwithstanding the fact that the Company's
Investment Adviser is aggressively pursuing the realisation strategy outlined
herein, shareholders are reminded that JZCP's portfolio of assets is highly
illiquid and the sale of which is dependent upon positive market conditions.
Shareholders are also reminded that JZCP and its Investment Adviser do not have
control over a large portion of the JZCP portfolio and thus the Investment
Adviser must seek the cooperation of JZCP's portfolio partners to realise
assets. To date, our Investment Adviser has been successful in getting the
cooperation of JZCP's investment partners.
Regarding secondary sales, the Company is currently in the market with a
portfolio of select US microcap assets; JZCP expects to realise between
$150-170 million in gross proceeds prior to 28 February 2020 from these
transactions.
In addition, the Company's Investment Adviser expects to launch the US Side-Car
Fund within the next 45 days, targeting approximately $500 million. As
mentioned in the Company's last Annual Report, the bulk of any new US microcap
investments will be directed to this new US Side-Car Fund, which will be
substantially funded by third-party limited partners. In order to successfully
complete the marketing of the US Side-Car Fund, JZCP will be required to invest
approximately 5% of the fundraise in order to validate to future LPs that JZCP
will continue to support its US microcap buyout program and team. It is
anticipated that this investment will be called over a five-year period, thus
putting significantly less of a burden on JZCP's future cash flow.
JZCP's real estate assets do require additional investments for debt service
and certain pre-development expenses. At the end of last year, the Company's
Investment Adviser successfully sold approximately half of one of JZCP's
Brooklyn, NY, development sites to HomeFed, a real estate investor and
developer of mixed-use projects in the United States. The price was
approximately at NAV, which had been marked up from original cost. The
Investment Adviser is actively seeking investment partners or outright sales
for a number of the Company's other development sites. The Investment Adviser
has indicated that it does not expect to make any new real estate investments,
other than in the Company's existing real estate portfolio.
Additionally, other than honouring JZCP's funding commitments and supporting
its portfolio of assets, it is anticipated that no meaningful capital will be
dedicated to new investments. The Investment Adviser instead intends to
dedicate its activities to achieving realisations and working on the Company's
current portfolio of assets to enhance values.
The Board expects to publish a circular to all shareholders convening an
extraordinary general meeting of the Company to approve this revised investment
policy as well as the Company's investment in the US Side-Car Fund as soon as
practicable.
For further information:
Ed Berry / Kit Dunford +44 (0) 20 3727 1046 / 1143
FTI Consulting
David Zalaznick +1 (212) 485 9410
Jordan/Zalaznick Advisers, Inc.
Sam Walden +44 (0) 1481 745385
Northern Trust International Fund
Administration Services (Guernsey)
Limited
About JZCP
JZ Capital Partners ("JZCP") is one of the oldest closed-end investment
companies listed on the London Stock Exchange. It seeks to provide shareholders
with a return by investing selectively in US and European microcap companies
and US real estate. JZCP receives investment advice from Jordan/Zalaznick
Advisers, Inc. ("JZAI") which is led by David Zalaznick and Jay Jordan. They
have worked together for more than 35 years and are supported by teams of
investment professionals in New York, Chicago, London and Madrid. JZAI's
experts work with the existing management of microcap companies to help build
better businesses, create value and deliver strong returns for investors. For
more information please visit www.jzcp.com.
Important Notice
This announcement is not an offering of securities. Any securities offered have
not been and will not be registered under the US Securities Act and may not be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements.
This announcement also includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or comparable
terminology. These forward-looking statements relate to matters that are not
historical facts. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future. Forward-looking statements are not
guarantees of future performance. The Company's actual investment performance,
results of operations, financial condition, liquidity, policies and the
development of its strategies may differ materially from the impression created
by the forward-looking statements contained in this announcement. In addition,
even if the investment performance, result of operations, financial condition,
liquidity and policies of the Company and development of its strategies, are
consistent with the forward-looking statements contained in this announcement,
those results or developments may not be indicative of results or developments
in subsequent periods. These forward-looking statements speak only as at the
date of this announcement. Subject to their legal and regulatory obligations,
each of the Company, the Investment Adviser and their respective affiliates
expressly disclaims any obligations to update, review or revise any
forward-looking statement contained herein whether to reflect any change in
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based or as a result of new
information, future developments or otherwise.
END
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