JZ CAPITAL PARTNERS
LIMITED
(a closed-end collective investment scheme incorporated with
limited liability under the laws of Guernsey with registered number
48761)
LEI: 549300TZCK08Q16HHU44
JZCP agrees
amendments to its Senior Facility
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR").
23 October 2020
JZ Capital Partners Limited ("JZCP" or the "Company"), the
London listed fund that invests in
US and European micro-cap companies and US real estate, is today
pleased to announce that it has reached agreement with its senior
lenders to amend the terms of its existing senior facility
agreement (the "Senior Facility").
As announced on 8 October 2020,
the Company had breached its minimum asset coverage ratio under the
Senior Facility and was also in default under the facility having
not agreed to amended terms with its senior lenders by 7 October 2020. It was also noted in that
announcement that, if the existing or any other event of default
under the Senior Facility were to continue, the Company would be
prohibited from making payments to the holders of its Convertible
Unsecured Loan Stock due 2021 ("CULS") on any subsequent CULS
interest payment date, absent either a waiver, a further consent or
the amended terms of the facility allowing for such payments to be
made.
The Company is however now pleased to announce that its senior
lenders have waived the Company's aforementioned and other
technical breaches and defaults, with agreement also having been
reached as to the amended terms of the Senior Facility by way of
the Company's entry into an amendment agreement to the facility
(the "Amended Senior Facility) with, among others, Guggenheim
Partners Europe Limited as a senior lender, administrative agent
for the senior lenders and collateral agent.
Under the terms of the Amended Senior Facility, approximately
US$40 million of the outstanding
principal amount of approximately US$150
million under the Senior Facility has been assigned from the
existing lenders to clients and funds advised by Cohanzick
Management, LLC and CrossingBridge Advisors, LLC. The replacement
lenders (of approximately US$40
million of the outstanding principal amount) have agreed,
pursuant to an agreement among lenders, to be subordinated to the
existing lenders (of approximately US$110
million of the outstanding principal amount) under the
Amended Senior Facility. In exchange, it has been agreed under the
Amended Senior Facility that the interest rate payable by the
Company for the loans funded by the replacement lenders will accrue
interest at a rate of Libor + 11.00%, instead of Libor + 5.75% as
is applicable to the existing lenders.
The Company has in turn secured more advantageous terms for
itself including the minimum asset coverage covenant being reset
(from not less than 4.00:1.00 to a lower threshold of initially not
less than 3.25 to 1.00 and from completion of the recently
announced Secondary Sale or 7 December
2020, whichever is earlier, not less than 3.50:1.00) and a
relaxation of rating requirements, removal of certain concentration
limits, updates to the use of proceeds requirements pertaining to
asset sales to preserve liquidity, and reduced requirements related
to its real estate collateral and reporting on investments. The
Company has also agreed to certain limitations on permitted
investments going forwards (consistent with its recently amended
and restated investment policy), reductions to its permitted
unsecured indebtedness and encumbrances, and certain restrictions
on dividends until the senior debt is repaid.
In addition, as part of the recently announced Secondary Sale,
which is expected to close following approval of the Company's
ordinary shareholders in early December
2020, the Company has agreed that US$70 million of any proceeds received by the
Company from that sale and other recent sales will be used to repay
the senior lenders. As mentioned above, the replacement lenders
will be subordinated to the existing lenders under the Amended
Senior Facility and as such the repayment of any such proceeds of
US$70 million will first be applied
to the existing lenders, such that thereafter the outstanding loans
from the existing lenders will be reduced from approximately
US$110 million to approximately
US$40 million and the outstanding
loans from the replacement lenders will remain at approximately
US$40 million. Completion of the
Secondary Sale by 7 December 2020 is,
among others, a condition subsequent of the Amended Senior
Facility.
The term of the Amended Senior Facility remains as expiring on
12 June 2021 with repayment falling
due on the same date, albeit with the possibility of extension in
certain limited circumstances.
For completeness, the Company notes that following completion of
the Secondary Sale and use of any proceeds therefrom and other
recent sales to make the repayment of US$70
million to the existing lenders under the Amended Senior
Facility, the Company’s approximate key debt obligations will be as
follows: (i) senior debt of approximately US$80 million pursuant to the Amended Senior
Facility (due 12 June 2021), (ii)
CULS of approximately £38.9m (due 30 July
2021), and (iii) the Company's Zero Dividend Preference
Shares of approximately £57.6m (due 1
October 2022).
Also for completeness and by reference to its earlier
announcements, the Company last of all notes that, as at this time
it is no longer in default under the Senior Facility, the Company
is currently no longer prohibited from making interest payments to
the holders of the CULS. The Company will also be continuing to
make announcements as required in relation to developments and the
realisation of its strategy as matters progress.
Market Abuse Regulation:
The information contained within this announcement is inside
information as stipulated under MAR. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain. The person responsible for arranging for the
release of this announcement on behalf of JZCP is David Macfarlane, Chairman of JZCP.
For further information:
Ed Berry
FTI Consulting |
+44 (0) 20 3727 1046 |
David Zalaznick
Jordan/Zalaznick Advisers, Inc. |
+1 (212) 485 9410 |
Sam Walden
Northern Trust International Fund Administration Services
(Guernsey) Limited |
+44 (0)1481 745385 |
Important Notice
This announcement 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.