ADAM.L Regulatory News (ADAM)

Adamas Finance Asia Limited

BRJ China Credit Fund recent exit and new investments

Adamas Finance Asia Limited ("ADAM" or the "Company") is pleased to announce that BRJ China Credit Fund Limited ("BRJ" or the "Fund"), an investment fund into which ADAM has invested US$800,000 in aggregate, has achieved a gross IRR of 57.04% from a newly-exited project, Project Jinhua.

Since ADAM's initial investment into BRJ in April 2014, the Fund has achieved three exits from early investments, yielding gross IRRs of 27.26%, 31.83% and 57.04% on fully-repaid loans of US$2.1 million, US$2.4 million and US$4.8 million, respectively.

BRJ was launched in August 2013 by Hong Kong-based Adamas Asset Management (HK) Limited ("Adamas"), which since February 2014 has been has been acting as ADAM's investment manager.

With Project Jinhua, BRJ provided short term finance for a real estate developer in Jinhua. The borrower has now repaid in full both the principal and interest on the RMB30 million (approx. US$4.8 million) loan. The exits from Project Jinhua, Project Renheng and Project Changlelu have increased BRJ's Net Asset Value, and the cash generated is available for future investment.

The BRJ investment in Project Jinhua was in line with the strategic approach followed by the Adamas investment team, which places strong emphasis on rigorous due diligence, tight management involvement and an insistence on robust collateral. The collateral backing was a shopping mall in the heart of Jinhua city, which together with the assets owned by the corporate guarantors from two related companies, led to an overall loan-to-value ratio of 2.93%.

Furthermore, BRJ has recently funded another two deals, Project Innovation and Project Landmark.

Project Innovation is a US$520,853 loan to a leading natural resource trading company as an advance upfront payment for its oil trading business. The collateral backing Project Innovation is a convertible bond issued by a Hong Kong main-board listed company, with an overall loan-to-value ratio of 20.55%. The collateral was further underpinned by a personal guarantee from one of the main shareholders of another Hong Kong main-board listed company (with a current market cap of approximately US$1 billion).

Project Landmark is a RMB 30 million loan to a company which is able to purchase some shops at a substantial discount to market rate. BRJ will be purchasing the shops on the borrower's behalf, and hence the shops will be owned by BRJ as collateral with a loan-to-value ratio of 50%. The shops are located in a shopping mall in a prime location in Zhejiang, China.

BRJ was launched by Adamas to provide capital for operationally-sound Chinese SMEs in need of short-term bridging finance not easily available within the PRC, where more than 90% of such companies have difficulty in obtaining bank funding. The Fund plans to invest US$50 million, seeking target returns of 24%-30% per annum with the objective of an annual dividend of 8%, payable semi-annually.

Enquiries: