JZ Capital Partners To Raise USD150 Million To Fund Investments (ALLISS)

Fri, 04th Sep 2015 06:59

LONDON (Alliance News) - JZ Capital Partners Ltd, which invests in US and European microcap companies and US real estate, on Friday revealed plans to raise about USD150 million in a share placing and open offer to fund new investments as it doesn't currently have the capital to fund them.

The London-listed fund said that existing ordinary shareholders have committed to subscribe for new shares worth USD135.4 million.

JZ Capital Partners proposed a "rollover offer" for 2016 zero dividend preference shares to be exchanged into 2022 zero dividend preference shares, a move designed to lower its cost of capital and "rebalance" its debt maturity profile.

The company said it wants to increase funding to Spruceview Capital Partners, its newly established asset management business in the US, with JZ Capital Partners to contribute USD15 million over the next two-to-four years in an investment to be matched by co-founders and investment advisers David Zalaznick and Jay Jordan.

In addition to investment opportunities arising for Jordan/Zalaznick Advisers Inc, the company's investment adviser, the capital raising was motivated by "an appetite" from some ordinary shareholders to deploy additional capital, according to JZ Capital Partners.

JZ Capital Partners said it is to issue up to 23.4 million new ordinary shares to raise the funds.

The offer price has been set at 419.19 pence per new share, a 39.7% discount to net asset value at the end of July, and ordinary shareholders who do not take up the offer face 36% dilution of their shareholdings. JZ Capital Partners said that more than 50% of shareholders have committed to back the placing and open offer in the required vote.

JZ Capital Partners said the fundraising could help to narrow the discount at which its share trade to net asset value, a phenomenon which it attributed to lack of size and market liquidity. It said that returning capital to shareholders or shrinking its portfolio would be unappealing to its long-term shareholders and an ineffective way of tackling the discount.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

Jz Capital