ICP.L Regulatory News (ICP)

10 Jan 2008 07:01

Intermediate Capital Group PLC10 January 2008 Thursday, 10th January 2008 Interim Management Statement for the three months to 31 December 2007 ICG REPORTS A RECORD INCREASE IN ITS LOAN AND INVESTMENT PORTFOLIO AND ANNOUNCESA RIGHTS ISSUE TO RAISE NET PROCEEDS OF £175 MILLION TO FUND GROWTH After the strong performance by ICG in the six months to 30 September 2007 weare pleased to report record growth in our loan and investment book of 16.5%during the three months to 31 December 2007. Better than expected loan bookgrowth will, in due course, result in further growth in core income. The last quarter saw a significant change in the credit markets in which weoperate. The competitive landscape has moved further in our favour as CDOs andCredit Hedge funds find themselves short of liquidity. We believe that we areentering a phase in the debt cycle where long term investors with access topermanent capital, such as ourselves, will see considerable opportunities toinvest at attractive terms. Indeed this has already proved to be the case in thelast quarter since the credit bubble burst. Over the three month period we arranged or provided £566m in 10 new investments,compared with £898m in 21 transactions in the six months to 30 September 2007.Of this £566m, £319m was retained on our balance sheet and 40% were assets soldby the banks looking to free up their balance sheets of underwriting positionswhich they have been unable to syndicate following the turn in the creditmarkets. As well as these opportunities in the secondary market our core midmarket segment is gradually reopening in Europe and North America and continuesto experience good growth in the Asia Pacific Region. Moreover mezzanine isincreasingly playing a central part in successful LBO financings. At the same time, there was a marked slow down in repayments in the thirdquarter with £82m coming back to our balance sheet compared to £458m in the sixmonths to 30 September 2007. Owing to the lower level of exits and repayments,there were no capital gains in the third quarter. These investment opportunities and the unusually low early repayments haveresulted in a strong increase in our loan and investment portfolio, which grew16.5% to £2,069m over the three months to 31 December (from £1,776m at 30September 2007). As a consequence of these market opportunities and thesignificantly reduced level of exits we expect continued growth in our loan bookand are proposing a 2 for 9 rights issue to raise net proceeds of circa £175m.Further details of the rights issue are available on our website. We have also recently announced a BBB+ rating by Fitch Ratings which will widenthe range of potential sources of debt capital. The rights issue, along withaccess to the investment grade bond market, will allow us to further takeadvantage of the investment opportunities we are currently seeing. Meanwhile our portfolio continues to perform well, however, we believe thatthere is growing risk to the wider economy which could, in due course, result inhigher default rates. In these circumstances, maintaining our investmentdiscipline and sticking to the highest quality credits remains our priority. Looking forward to the full year we expect the strong growth in our loan andinvestment portfolio to continue driving further growth in core income. Key tothis growth is the significantly lower level of early repayments which will inturn result in lower capital gains in the second half. Enquiries: Tom Attwood, Managing Director, Intermediate Capital Group PLC (020) 7628 9898 Philip Keller, Finance Director, Intermediate Capital Group PLC (020) 7628 9898 Jean-Christophe Rey, Investor Relations, Intermediate Capital Group PLC (020)7448 5876 Helen Barnes/Teresa Bianchi, Brunswick Group Limited (020) 7404 5959 For more information, please log on to http://www.icgplc.com. This interim management statement has been prepared solely to provide additionalinformation to shareholders as a body to meet the relevant requirements of theUK Listing Authority's Disclosure and Transparency Rules. The interim managementstatement should not be relied on by any other party or for any other purpose. This interim management statement may contain forward-looking statements. Thesestatements have been made by the directors in good faith based on theinformation available to them up to the time of their approval of this reportand should be treated with caution due to the inherent uncertainties, includingboth economic and business risk factors, underlying such forward-lookinginformation. These written materials are not an offer of securities for sale in the UnitedStates. Securities may not offered or sold in the United States absentregistration under the US Securities Act of 1933, as amended, or an exemptionthere from. The issuer has not and does not intend to register any securitiesunder the US Securities Act of 1933, as amended, and does not intend to offerany securities to the public in the United States. No money, securities or otherconsideration from any person inside the United States is being solicited and,if sent in response to the information contained in these written materials,will not be accepted. This interim management statement has been prepared solely to provide additionalinformation to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. The interim managementstatement should not be relied on by any other party or for any other purpose. This interim management statement may contain forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, includingboth economic and business risk factors, underlying such forward-looking information. These written materials are not an offer of securities for sale in the United States. Securities may not offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption there from. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicitedand, if sent in response to the information contained in these written materials, will not be accepted. ICG's New Investments 3 months to 31 December 2007 In the 3 months ended 31 December 2007 ICG and funds managed by ICG invested inthe 10 following companies: Europe Alma is a French company that provides tax recovery and cost reduction services.In December 2007 ICG invested €45m in the mezzanine facility arranged to assistthe buyout. ICG also invested €8m in the equity. Applus+ is a Spanish inspection, certification and technological servicescompany. In November 2007 ICG arranged mezzanine facilities of €150m to assistin the buyout. ICG also invested €30m in the equity. Bureau Van Dijk is an electronic publisher of comprehensive company informationbased in Belgium. In December 2007 ICG invested €166m in the mezzaninefacilities arranged to help restructure the secondary buyout financing. Elis, a French company, is a leading textile rental and cleaning business. InNovember 2007 ICG invested €150.6m in the mezzanine finance provided to supportthe tertiary buyout. Firth Rixson is a UK based company that manufactures components for aeroengines. In December 2007 ICG took a participation of £18.4m in the mezzaninefacility arranged to assist the secondary buyout. ICG also invested £2.8m in theequity. Interbest is a Netherlands company that provides roadside advertising. InDecember 2007 ICG arranged and provided a €20m mezzanine facility to assist inthe buyout. ICG also invested €2m in the equity. Swets, a Dutch company, is a leading global subscription services business. InOctober 2007 ICG took a participation of €20m in the mezzanine facilitiesprovided to support the buyout. ICG also invested €5m in the equity. Asia Pacific Hoyts is a multiplex cinema and screen advertising company in Australia. InDecember 2007 ICG arranged and provided an A$70m Mezzanine facility to assist inthe buyout. ICG also invested A$10m in the equity. U.S.A. ITT Switches is a leading global designer, manufacturer and distributor ofhighly engineered electromechanical switches, interface control systems and domearrays with headquarters in the USA. In November 2007 ICG took a participationof USD34.5m in the second lien facility provided to assist the buyout. ICG alsoinvested USD6m in the equity. Growth Capital Gaucho Grill is a chain of restaurants based in the UK. In December 2007 ICGarranged and provided financing of £49m as a minority investment alongsidemanagement in the buyout. This information is provided by RNS The company news service from the London Stock Exchange