Equus Announces Second Quarter Net Asset Value
August 15 2011 - 2:08PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) (the
"Fund" or "Equus") reports net assets as of June 30, 2011, of
$41,432,000, an increase of $5,099,000 since March 31, 2011. Net
assets per share decreased to $3.92 as of June 30, 2011 from $4.10
as of March 31, 2011. Comparative data is summarized below (in
thousands, except per share amounts):
As of the Quarter Ended 6/30/2011 3/31/2011 12/31/2010 9/30/2010 6/30/2010
--------- --------- ---------- --------- ---------
Net assets $ 41,432 $ 36,333 $ 38,051 $ 31,474 $ 37,888
Shares outstanding 10,562 8,862 8,862 8,862 8,862
Net assets per share $ 3.92 $ 4.10 $ 4.29 $ 3.55 $ 4.28
The increase in aggregate net asset value resulted principally
from the Fund's acquisition of certain bonds issued by Orco Germany
S.A. ("Orco Germany") as further described below and an increase in
the fair value of the Fund's investment in Sovereign Business
Forms, Inc. from $6.6 million to $7.1 million due to improved
operating performance. The decrease in net asset value on a
per-share basis resulted principally from a further decrease in the
fair value of the Fund's investment in ConGlobal Industries
Holding, Inc., ("ConGlobal") from $7.0 million to $5.9 million.
This decrease was due to a decline in ConGlobal's operating results
caused by lower revenues from shipping container storage fees.
Significant events during the quarter included the
following:
- Purchase of Orco Germany Bonds. On April
27, 2011, the Fund announced that it had entered into two separate
transactions involving the purchase of an aggregate of 11,408 bonds
("Bonds") issued by Orco Germany, a commercial and multi-family
residential real estate holding company and developer based in
Berlin. The consideration provided to the selling bondholders
consisted of an aggregate of 1,700,000 newly issued shares of
common stock of the Fund. The Fund received 8,890 of the Bonds on
April 27, 2011. On May 9, 2011, one of these agreements was amended
and restated to provide for an additional 45 days to deliver the
remaining 2,518 of the Bonds in exchange for providing to the Fund
approximately $1.6 million in cash as security for such delivery.
As the remaining bonds were not delivered by the specified date,
the cash collateral became free and clear property of the Fund on
June 23, 2011. As a result of these transactions, the number of
Equus shares outstanding increased from 8,861,646 to 10,561,646
shares.
- Changes in Management. On June 7, 2011,
the Fund announced that the Board of Directors had appointed
Alessandro Benedetti as Executive Chairman and John A. Hardy as the
Fund's Chief Executive Officer.
- Annual Shareholder Meeting. On June 10,
2011, the Fund held its annual meeting of shareholders ("Annual
Meeting"), the purpose of which was to: (i) elect nine director
nominees, each for a term of one year, (ii) ratify the appointment
of UHY LLP as the Fund's independent auditor for the fiscal year
ended December 31, 2011, (iii) approve on a non-binding advisory
basis, the compensation paid to the Fund's named executive officers
in 2010, and (iv) approve, on a non-binding advisory basis, the
frequency of shareholder advisory votes concerning the Fund's
executive compensation. Holders of 93.48% of the Fund's outstanding
shares were present in person or represented by proxy at the Annual
Meeting and approved the election of the nine director nominees,
the appointment of UHY for fiscal year 2011, the compensation paid
to the Fund's named executive officers in 2010, and the frequency
of shareholder advisory votes concerning the Fund's executive
compensation.
Significant events subsequent to the end of the quarter were as
follows:
- Potential Sale of Spectrum. On July 9,
2011 Spectrum Management, LLC ("Spectrum") entered into a three
month Exclusivity Agreement with a potential buyer of its asset
tracking business which agreement expires October 11, 2011. The
potential buyer has also written the company a letter expressing an
indication of interest, with a purchase price of $10.0 million.
Should a transaction occur, the buyer has proposed to finance the
transaction with $7.5 million in cash and $2.5 million in a
contingent payment agreement. The closing of the transaction is
subject to the completion of financial and operational due
diligence, successful negotiation and completion of documentation,
approval of third party financing, and approval of the board of
directors and shareholders of Spectrum. The timing and final terms
of this transaction are uncertain and have not been included in the
Fund's valuation analysis for the quarter ended June 30, 2011.
- Follow-On Investment in Spectrum. On
August 4, 2011, the Fund invested $0.1 million in Spectrum
Management, LLC as a follow-on investment in the form of a 16%
promissory note facility.
About Equus The Fund is a business
development company that trades as a closed-end fund on the New
York Stock Exchange, under the symbol "EQS." Additional information
on the Fund may be obtained from the Fund's website at
www.equuscap.com.
This press release may contain certain forward-looking
statements regarding future circumstances. These forward-looking
statements are based upon the Fund's current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the risks and uncertainties described in the Fund's
filings with the SEC. Actual results, events, and performance may
differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof.
The Fund undertakes no obligation to release publicly any revisions
to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. The inclusion of any statement
in this release does not constitute an admission by the Fund or any
other person that the events or circumstances described in such
statements are material.
Contact: Patricia Baronowski Pristine Advisers, LLC (631)
756-2486
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