REG-JZ Capital Partners Ltd: Update in relation to Secondary Sale

JZ Capital PartnersAnnouncement

14/12/2023 07:15

JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP")

(a closed-ended investment company incorporated with limited liability under
the laws of Guernsey with registered number 48761)

 

LEI 549300TZCK08Q16HHU44

 

Update in relation to Secondary Sale

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014, WHICH FORMS PART OF UK LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

14 December 2023

JZ Capital Partners Limited, the London listed fund that has investments in US
and European microcap companies and US real estate, is pleased to provide an
update in relation to its interest in the secondary fund, JZHL Secondary Fund
LP (the "Secondary Fund"), to which JZCP earlier sold its interests in certain
US microcap portfolio companies (the "Secondary Sale"). The Secondary Sale was
announced on 19 October 2020, with further details of the sale being included
in a circular sent to shareholders of the Company dated 29 October 2020.

JZCP is pleased to announce that the Secondary Fund has sold its interest in
Felix Storch Holdings, LLC ("Felix Storch") for consideration of approximately
US$167.7 million.

Shareholders are reminded that, as detailed in the aforementioned announcement
and circular, JZCP received as consideration for the Secondary Sale, and in
addition to the previously received approximately US$90 million in cash, a
special limited partner interest in the Secondary Fund entitling JZCP to
certain distributions and other rights and obligations from the Secondary Fund
(the "Special LP Interest"). Any distributions to be received by JZCP as a
result of its Special LP Interest are subject to an agreed distribution
waterfall as detailed in the aforementioned announcement and circular which
provides that, once the other investors in the Secondary Fund have received
their initial required distributions determined by reference to their
respective contributions to the Secondary Fund and amounting to approximately
US$132.6 million, in aggregate, JZCP is entitled to receive as distributions
from the Secondary Fund: (i) 95 per cent. of all distributions until it has
received distributions equal to US$67.6 million; and (ii) thereafter, 37.5 per
cent. of all distributions.

In accordance with the agreed distribution waterfall described above, JZCP
will receive a distribution from the Secondary Fund of approximately US$62.5
million in connection with the sale of Felix Storch, which would correspond to
a NAV uplift to JZCP of approximately 19 cents per ordinary share. JZCP’s
remaining interest in the Secondary Fund, based on pro forma financials as at
31 August 2023, is valued at approximately US$32.5 million.

The sale of Felix Storch follows the previously announced disposals of certain
interests in the Secondary Fund, in connection with which JZCP received
aggregate distribution proceeds of US$97.4 million. The Company will make
further announcements in relation to any further distributions of the
Secondary Fund as and when appropriate.

The Company notes that its only outstanding debt obligation is approximately
US$45.0 million (plus accrued interest) under the Company's senior facility
provided by WhiteHorse Capital Management, LLC due on 26 January 2027. The
Company remains focused on the implementation of the new investment policy to
realise maximum value from the Company's investments and, after the repayment
of all debt, to return capital to shareholders. To that end and in accordance
with the investment policy, the Company intends to use the proceeds from the
sale of Felix Storch to repay its senior facility in full. This repayment
will, subject to retaining sufficient funds to cover existing obligations and
support certain existing investments to maximise their value, enable the
Company to plan to commence making distributions to shareholders, as
previously announced in the Company's interim report and financial statements
released on 9 November 2023. The Company will make further announcements
regarding the repayment of the senior facility as and when appropriate.

Market Abuse Regulation

The information contained within this announcement is considered by the
Company to constitute 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 the release of this announcement on
behalf of the Company is Sharon Parr, Board member of JZCP.

______________________________________________________________________________________

For further information:

 

 Kit Dunford / Ed Berry                                                          +44 (0)7717 417 038 / +44 (0)7703 330 199  
  FTI Consulting                                                                                                            
 David Zalaznick                                                                 +1 (212) 485 9410                          
  Jordan/Zalaznick Advisers, Inc.                                                                                           
 Hannah Hayward                                                                  +44 (0) 1481 745417                        
  Northern Trust International Fund Administration Services (Guernsey) Limited                                              

 

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, Jordan/Zalaznick
Advisers, Inc. 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.



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