Equus Announces Second Quarter Net Asset Value
August 15 2012 - 11:22PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) (the
"Fund" or "Equus") reports net assets as of June 30, 2012, of $33.4
million, a decrease of approximately $4.2 million since March 31,
2012. Net assets per share decreased to $3.16 as of June 30, 2012
from $3.56 as of March 31, 2012. Cash and cash equivalents totaled
$27.0 million as of June 30, 2012, an increase of $10.7 million
since March 31, 2012. Comparative data is summarized below (in
thousands, except per share amounts):
As of the Quarter Ended 6/30/2012 3/31/2012 12/31/2011 9/30/2011 6/30/2011
--------- --------- ---------- --------- ---------
Net assets $ 33,418 $ 37,651 $ 38,148 $ 38,970 $ 41,432
Shares outstanding 10,562 10,562 10,562 10,562 10,562
Net assets per share $ 3.16 $ 3.56 $ 3.61 $ 3.69 $ 3.92
Cash and Cash Equivalents $ 27,039 $ 16,296 $ 16,813 $ 16,648 $ 17,333
Cash per Share $ 2.56 $ 1.54 $ 1.59 $ 1.58 $ 1.64
Equus also reported a decrease in total Fund expenses of
approximately $0.6 million for the second quarter of 2012 as
compared to the second quarter of 2011, and a decrease of
approximately $1.0 million for the first six months of 2012 as
compared to the first six months of 2011.
The changes in net asset value resulted principally from the
following significant events which occurred during this
quarter:
- Sale of Interest in ConGlobal Industries
Holding, Inc. ("ConGlobal"). On May 30, 2012, the Fund
announced that in exchange for $5.25 million in cash, it had sold
to 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. ConGlobal had advised Equus that it would
be difficult to repay the Equus loan, due in December 2012, in the
principal amount of $6.0 million plus accrued interest of
approximately $1.9 million. This was a result of a number of
factors, including a decline in EBITDA from historical highs and
the loss of two of ConGlobal's key customer accounts in the
Northwest. 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 investment for over 15 years. As a
result of these factors Equus sought to monetize this position and
did not wish to grant further extensions to the maturity of the
note as it had done in the past. The Fund worked with ConGlobal to
achieve a compromise which resulted in the closing of the
transaction. As a result of the transaction, the Fund's Net Asset
Value (NAV) declined $2.7 million or $0.26 per share.
- Sale of Interest in Sovereign Business Forms,
Inc. ("Sovereign"). On June 21, 2012, the Fund announced that
it had sold to Sovereign, the Fund's 55% fully-diluted equity
interest in Sovereign, together with the Fund's promissory note
issued by Sovereign and all interest as accrued in exchange for
$6.36 million in cash. Having held its interest in Sovereign for
approximately 16 years, Equus wanted to monetize its investment. In
May 2011 an investment banking firm was retained to canvas
potential strategic buyers, determine market interest and explore a
possible sale of the company. No formal offers in a valuation range
acceptable to the Fund were received. Subsequently, Sovereign's
Management, with the cooperation of the Fund, refinanced operations
to obtain the capital to buy out the position held by Equus. As a
result of the transaction, the Fund's NAV declined $0.4 million or
$0.04 per share.
- Conversion of Certain Orco Germany S.A. ("Orco
Germany") Bonds. On May 7, 2012, holders of 72.5% of all Orco
Germany bondholders approved a joint restructuring of certain bond
debt of Orco Germany and its parent company, Orco Property Group
S.A. ("OPG"). Pursuant to such restructuring, approximately 84.5%
of the Orco Germany bonds held by each bondholder were converted
into Obligations Convertibles en Actions ("OCA") on May 9, 2012.
The OCA are expected to be converted into an aggregate of
26,209,613 OPG shares to be delivered in two tranches. The first
tranche, consisting of 18,361,540 OPG shares, was delivered in May
2012, of which the Fund received 1,102,455 OPG shares. The second
tranche, consisting of 7,848,073 OPG shares, is expected to be
received in September 2012. The remaining 15.5% of the Orco Germany
bonds held by each bondholder are expected to be converted into
newly-issued 6-year OPG notes ("New OPG Notes") with a face value
of EUR 20.0 million bearing cash and PIK interest each at 5% per
annum, which interest percentages may be reduced over time upon
timely repayments of principal tranches during a four-year period
commencing in 2015. Of the total amount of New OPG Notes issued,
Equus expects to receive New OPG Notes in the face amount of EUR
1,199,927. Certain terms of the restructuring require approval of
the Paris Commercial Court, which is overseeing safeguard
proceedings (procédure de sauvegarde) with respect to OPG and its
assets. As of June 30, 2012, Equus held 1,102,455 OPG shares, OCA
that is convertible into an additional 471,170 OPG shares, and
1,378 Orco Germany bonds, or approximately 6.0% of all Orco Germany
bonds outstanding, which have yet to be converted into the New OPG
Notes.
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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