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
Real Estate
Valuations
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR").
17 September 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, today
announces that it has now received appraisals for most of its real
estate portfolio assets as at 31 August
2020. The Board and the Company's investment adviser had, as
previously announced in the Company's annual results for the year
ended 29 February 2020, commissioned
these further appraisals to establish an updated value of its real
estate investments in light of the effects of the Covid-19
pandemic, believing its impact to be potentially significant and
adverse though its quantum could not be estimated at the time.
Whilst the Company has not yet received all of the appraisals
and is still in the process of reviewing those that it has
received, the newly received appraisals do, in line with the
Company's previously announced expectation in its annual results,
indicate materially lower valuations. As a consequence, the Company
expects it will likely experience further net write downs; based on
the information at the Company's disposal at this time, the Company
currently believes the mark down to its net asset value could be in
the approximate range of between $80
to $100 million, subject to receiving
and reviewing all of the appraisals. The Company will make further
announcements regarding the appraisals and related write downs as
required.
As a consequence of the aforementioned write downs, the Company
currently expects that it will require a waiver under its senior
facility with Guggenheim Partners, as the Company will breach its
minimum asset coverage ratio by the end of September 2020. The Company is working towards
and expects to receive such a waiver. Absent this waiver (or
otherwise obtaining consent), the Company will be prohibited from
making an interest payment due on 30
September 2020 to the holders of its Convertible Unsecured
Loan Stock due 2021 ("CULS"). Any interest not paid under the CULS
in accordance with the terms of the subordination agreement to
which the CULS are subject will not constitute a default under the
CULS. Again, as mentioned above, the Company does expect to receive
a waiver (or to otherwise obtain consent) to allow for the payment
of the upcoming interest payment under the CULS.
Moreover, the Company and its lenders have made significant
progress in their ongoing discussions to amend the current lending
arrangements in a favourable way to the Company. As is the case for
the real estate valuations, the Company will make further
announcements as required in relation to the status of discussions
with its lenders including their impact on the CULS as matters
progress. Separately, the Company is pleased to report that its US
micro-cap portfolio is performing quite well and positive progress
is being made in relation to the previously announced secondary
sale of certain of its US micro-cap assets. It is anticipated that
the Company will reach an agreement in the near term on the
secondary sale and an announcement will follow. The secondary sale
if completed will provide the Company with the needed liquidity to
repay a substantial portion of its senior debt. The Company remains
committed to its strategy of realising value from its investment
portfolio, and to paying down debt in the first order.
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.