NOT FOR RELEASE OR DISTRIBUTION IN
OR INTO THE UNITED STATES.
JZ CAPITAL PARTNERS LIMITED
(the "Company" or "JZCP")
(a closed-end collective investment scheme incorporated with
limited liability under the laws of Guernsey with registered number
48761)
LEI: 549300TZCK08Q16HHU44
Update on
Liquidity Plan for JZCP
2 October 2019
Following the announcement on 8 May
2019, the Board of Directors of JZCP announces that it is
planning to convene an extraordinary general meeting of the Company
to approve a revised investment policy. In line with this previous
announcement, the Board is seeking to enshrine a strategy to look
to realise investments, pay down debt and materially reduce
commitments to new investments, such that capital may be returned
to shareholders.
The Board is pleased to report on the progress made in
implementing this plan to generate liquidity for JZCP. On
29 August 2019, the Company completed
its first tender offer for approximately $30
million, part of the previously announced plan to return
approximately $100 million in capital
to shareholders. Subject to timing of upcoming realisations, the
Company expects to return the balance of approximately $70 million to shareholders via a series of
tender offers, special dividends or opportunistic market buybacks
over the next 12-15 months.
Shortly prior to the close of the first tender offer, JZCP
finalized the sale of 80% of its interest in portfolio companies
Orizon and Avante, 34% above NAV, for $65.5
million in gross proceeds received by the Company. This
transaction brings total gross proceeds realised during the first
six months of the fiscal year to more than $120 million.
The Board has now decided on a more ambitious plan than
previously announced, being a plan to raise approximately
$400-500 million in liquidity by the
end of the Company’s fiscal year ending February 2023. This plan is intended to enable
JZCP to pay down a substantial amount of debt and return a
substantial amount of capital to shareholders while also meeting
the capital requirements of the portfolio in order to achieve NAV
growth.
JZCP’s plan calls for raising liquidity from realisations,
secondary sales of certain asset portfolios, joint venture
partnerships and the previously announced US Side-Car Fund.
Notwithstanding the fact that the Company’s Investment Adviser is
aggressively pursuing the realisation strategy outlined herein,
shareholders are reminded that JZCP’s portfolio of assets is highly
illiquid and the sale of which is dependent upon positive market
conditions. Shareholders are also reminded that JZCP and its
Investment Adviser do not have control over a large portion of the
JZCP portfolio and thus the Investment Adviser must seek the
cooperation of JZCP’s portfolio partners to realise assets. To
date, our Investment Adviser has been successful in getting the
cooperation of JZCP’s investment partners.
Regarding secondary sales, the Company is currently in the
market with a portfolio of select US microcap assets; JZCP expects
to realise between $150-170 million
in gross proceeds prior to 28 February
2020 from these transactions.
In addition, the Company’s Investment Adviser expects to launch
the US Side-Car Fund within the next 45 days, targeting
approximately $500 million. As
mentioned in the Company’s last Annual Report, the bulk of any new
US microcap investments will be directed to this new US Side-Car
Fund, which will be substantially funded by third-party limited
partners. In order to successfully complete the marketing of the US
Side-Car Fund, JZCP will be required to invest approximately 5% of
the fundraise in order to validate to future LPs that JZCP will
continue to support its US microcap buyout program and team. It is
anticipated that this investment will be called over a five-year
period, thus putting significantly less of a burden on JZCP’s
future cash flow.
JZCP’s real estate assets do require additional investments for
debt service and certain pre-development expenses. At the end of
last year, the Company’s Investment Adviser successfully sold
approximately half of one of JZCP’s Brooklyn, NY, development sites to HomeFed, a
real estate investor and developer of mixed-use projects in
the United States. The price was
approximately at NAV, which had been marked up from original cost.
The Investment Adviser is actively seeking investment partners or
outright sales for a number of the Company’s other development
sites. The Investment Adviser has indicated that it does not expect
to make any new real estate investments, other than in the
Company’s existing real estate portfolio.
Additionally, other than honouring JZCP’s funding commitments
and supporting its portfolio of assets, it is anticipated that no
meaningful capital will be dedicated to new investments. The
Investment Adviser instead intends to dedicate its activities to
achieving realisations and working on the Company’s current
portfolio of assets to enhance values.
The Board expects to publish a circular to all shareholders
convening an extraordinary general meeting of the Company to
approve this revised investment policy as well as the Company's
investment in the US Side-Car Fund as soon as practicable.
For further information:
Ed Berry / Kit
Dunford
FTI Consulting |
+44 (0) 20 3727 1046 / 1143 |
David Zalaznick
Jordan/Zalaznick Advisers, Inc. |
+1 (212) 485 9410 |
Sam Walden
Northern Trust International Fund Administration Services
(Guernsey) Limited |
+44 (0) 1481
745385 |
About JZCP
JZ Capital Partners ("JZCP") is one of the oldest
closed-end investment companies listed on the London Stock
Exchange. It seeks to provide shareholders with a return by
investing selectively in US and European microcap companies and US
real estate. JZCP receives investment advice from Jordan/Zalaznick
Advisers, Inc. ("JZAI") which is led by David Zalaznick and Jay
Jordan. They have worked together for more than 35 years and
are supported by teams of investment professionals in New York, Chicago, London and Madrid. JZAI’s experts work with the existing
management of microcap companies to help build better businesses,
create value and deliver strong returns for investors. For more
information please visit www.jzcp.com.
Important Notice
This announcement is not an offering of securities. Any
securities offered have not been and will not be registered under
the US Securities Act and may not be offered or sold in
the United States absent
registration or an applicable exemption from registration
requirements.
This announcement also 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.