Equus Disposes of Interest in ConGlobal for $5.25 Million in Cash
May 30 2012 - 10:42PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) ("Equus" or the "Fund")
announced that in exchange for $5.25 million in cash, it has sold
to ConGlobal Industries Holding, Inc. ("ConGlobal"), the Fund's
34.2% equity interest in ConGlobal, together with the Fund's
promissory note issued by ConGlobal and all interest as accrued.
The transaction closed today, and Equus has received the funds.
As a result of a number of factors, including a decline in
EBITDA from historical highs, together with the recent loss of two
of ConGlobal's key customer accounts in the Northwest, ConGlobal
had advised Equus that it would be difficult to repay the note held
by Equus, due in December 2012, in the principal amount of $6.0
million plus accrued interest of approximately $1.9 million.
In addition, the Equus note was subordinate to the position of
ConGlobal's senior lender and thus, ConGlobal was not required to
pay the Fund until the senior lender had been fully paid. The Fund
had held this position for over 15 years. As a result of these
factors, Equus did not wish to further extend the maturity of the
note. The Fund worked with ConGlobal to achieve a compromise which
has resulted in the closing of the transaction today.
As a result of the transaction, the Fund's net asset value will
decline $0.25 per share from the Fund's most recently reported net
asset value per share of $3.56 as of March 31, 2012. Based on cash
and cash equivalents of $16.8 million held by Equus at March 31,
2012, combined with the proceeds from the sale of its interest in
ConGlobal, the Fund's cash increased to $22.1 million, or $2.09 of
cash per share.
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.
Except as required by law, 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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