Equus Announces 2012 Year-End Net Asset Value
March 27 2013 - 8:07PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) (the
"Fund" or "Equus") reports net assets as of December 31, 2012, of
$32.9 million, an increase of approximately $1.2 million since
September 30, 2012. Net assets per share increased to $3.11 as of
December 31, 2012 from $3.00 as of September 30, 2012. Cash and
cash equivalents totaled $23.7 million as of December 31, 2012, a
decrease of $2.6 million since September 30, 2012. Comparative data
is summarized below (in thousands, except per share amounts):
As of the Quarter 12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Ended
---------- ---------- ---------- ---------- ----------
Net assets $32,875 $31,664 $33,418 $37,651 $38,148
Shares outstanding 10,562 10,562 10,562 10,562 10,562
Net assets per share $3.11 $3.00 $3.16 $3.56 $3.61
Cash and cash $23,687 $26,246 $27,039 $16,296 $16,813
equivalents
Cash per share $2.24 $2.48 $2.56 $1.54 $1.59
Equus also reported a decrease in total Fund expenses of
approximately $0.9 million, or 22%, for the year ended December 31,
2012 as compared to the year ended December 31, 2011.
Significant events during 2012 included the following:
- Sale of Interest in ConGlobal Industries
Holding, Inc. ("ConGlobal"). On May 30, 2012, the Fund
announced that in exchange for approximately $5.3 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. 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.
- Sale of Interest in Sovereign Business Forms,
Inc. ("Sovereign"). On June 21, 2012, the Fund announced that
it had sold 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 approximately
$6.4 million in cash. Having held its interest in Sovereign for
approximately 16 years, Equus wanted to monetize its investment. As
a result, Sovereign's Management, with the cooperation of the Fund,
refinanced operations to obtain the capital to buy out the position
held by Equus.
- Sale of Orco Property Group S. A. ("OPG")
Shares. OPG is a commercial and multi-family residential real
estate holding company based in Paris. In April 2011 the Fund made
its initial investment in certain 4% bonds due May 2012 ("Bonds")
of Orco Germany S.A., a controlled subsidiary of OPG. The
consideration for the Bonds consisted solely of 1,700,000 shares of
the Fund's common stock. During 2012, the Bonds were converted into
1,573,666 ordinary shares of OPG and 6-year notes of OPG ("OPG
notes") in the principal amount of EUR 1.2 million. The OPG notes,
due February 2018, bear interest of 5% cash and 5% PIK per annum,
which interest percentages may be reduced over time upon timely
repayments of principal tranches during a four-year period
commencing in 2015. On October 15, 2012, the Fund announced that it
had sold 1,500,000 of its OPG shares and received net cash proceeds
of EUR 3.8 million, or $4.9 million, based on the settlement date's
EUR-USD intra-day exchange rate of 1.293. This cash is in addition
to the $1.6 million of cash the Fund received in June 2011 (as a
result of the non-delivery of 2,518 of the Bonds). To date, the
Fund has received a total of approximately $6.5 million in cash as
a result of this transaction ($4.9 million from the OPG share sale
in October 2012, $1.6 million in June 2011 and a $40,778 interest
and partial repayment on March 1, 2013). Following the OPG share
sale, the Fund still holds 73,666 OPG shares and the OPG notes in
the principal amount of EUR 1.2 million described above.
- Acquisition of Oil & Gas Assets. On
December 27, 2012, the Fund invested $6.8 million to purchase the
working interests in 150 producing and non-producing oil and gas
wells, including associated development rights of approximately
23,000 acres situated on 15 separate properties in Texas and
Oklahoma The wells are operated by a number of experienced
operators, including a major multi-national oil and gas
conglomerate which has operating responsibility for approximately
half of the producing well interests. A substantial component of
the assets includes working interests in 40 producing wells, as
well as certain development rights, in the Conger Field, a
promising and well-known producing field in the Permian Basin in
West Texas. The working interests range from a de minimus amount to
50% of the leasehold production of these wells. Also included in
the purchased assets and total acreage described above are working
interests of 2.5% and 7.5% in the Burnell and North Pettus Units,
respectively, which collectively comprise approximately 13,000
acres in the area known as the "Eagle Ford Shale Play." The assets
were purchased from Warren American Oil Company, LLC, a Tulsa-based
oil & gas firm. The investment was made through Equus Energy,
LLC ("Equus Energy") a wholly-owned subsidiary of the Fund. Equus
Energy is intended to be used as a platform for additional
energy-related investments, with particular emphasis on oil and gas
properties.
Significant events subsequent to the end of 2012 included the
following:
- Interest Payment and Partial Principal
Repayment on OPG Notes. On March 1, 2013 the Fund received a
semi-annual interest payment of EUR 24,180 ($31,724) and a partial
principal repayment of EUR 6,901 ($9,054) in respect of EUR 1.2
million ($1.6 million) notes of OPG that the Fund received in
October 2012.
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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