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(Alliance News) - JZ Capital Partners Ltd on Friday gave the date of its general meeting to vote on a new investment policy and US side-car investment, as well as the disposal of JZ's interest in Xpress Logistics Solutions Inc.
Shares in JZ, a closed-end investment company, which invests in micro cap firms in US, were untraded at 472.00 pence in London on Friday.
Xpress - a subsidiary of JZ portfolio company US Logistics - has signed a USD45 million cash merger agreement with Capstone Logistics. JZ holds a 38% stake in Xpress by way of both its 38% interest in US Logistics - which owns 91% of Xpress - and its 3.6% interest directly in Xpress Logistics.
JZ said it expects to receive USD16.9 million from the merger. This consists of around USD8.0 million plus interest from a loan note redemption by Xpress; USD7.7 million plus dividends from the redemption of JZ's preferred interests in US Logistics; and USD863,000 from an initial consideration which will be held in escrow and is based on working adjustments.
Under listing rules, JZ is required to obtain written confirmation from a sponsor that the Xpress deal is fair, since it is considered to be a related party transaction.
However, JZ has opted "to depart from the requirement" since the costs and time involved in this confirmation "can be greater" in the case of a related party transaction concerning a disposal or acquisition. JZ's investment adviser has provided a written confirmation instead.
"The company is not subject to, but rather voluntarily complies with, the listing rules and, save for the absence of a fair and reasonable written confirmation in a form prescribed by the listing rules, the Xpress proposal is otherwise being treated in accordance with the listing rules including in respect of the requirement to obtain shareholder approval," said JZ.
The general meeting will take place on October 24, where JZ shareholders will also vote on the company's proposal for an amended investment policy, which was announced on Wednesday.
This policy will focus on realising investments, cutting commitments to new investments, and paying down debt. The firm will seek raise around USD400 million to USD500 million in liquidity by its financial year to the end of February 2023.
Furthermore, shareholders will also vote on a proposed investment in a new US side-car fund, which will be launched by JZ's investment adviser and is aiming for around USD500 million of capital commitments. The side-car will be named JZ Partners II, and will invest in US micro cap deals.
JZ will commit to invest up to USD25 million in the US side-car. David Zalaznick and Jay Jordan, founders of JZ's investment advisor, and other members of the investment advisor's US microcap investment team, will kick in another USD25 million. JZ and these other investors will invest on a 50:50 basis over a five-year period.
By Anna Farley; annafarley@alliancenews.com
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