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3 Jul 2009 11:51
JZ CAPITAL PARTNERS LIMITED
(Registration No. 48761)
Registered Office:
2ND FLOOR, REGENCY COURT, GLATEGNY ESPLANADE, ST. PETER PORT,
GUERNSEY, GY1 3NQ
___________________________
TELEPHONE: + 44 1481 720321
FACSIMILE: + 44 1481 716117
E-MAIL: JZCP@bfmgl.gg
|
For immediate release |
3 July 2009 |
Interim Management Statement
3 July 2009
JZ Capital Partners Limited ("JZCP" or the "Company"), a closed ended investment company incorporated in Guernsey whose corporate objective is to create a portfolio of investments in businesses primarily in the United States, announces its Interim Management Statement ("IMS") for the period from 1 March 2009 to 31 May 2009.
Update
On 18 June 2009, the shareholders approved the offerings of 227.6 million Ordinary Shares (at 42 pence per share), the redemption of 29.7 million Zero Dividend Preferred ("ZDP") Shares (at par, or £2.16 per share), the issuance of 4.7 million of new ZDP Shares (at £2.16 per share), a mark to market adjustment for JZCP's forward currency derivative contract, and a 1 for 5 Ordinary Share Consolidation. The effect of these actions on the audited 28 February 2009 balance sheet, assuming an exchange rate for £1.63 for every $1.00, is follows:
|
(All figures in thousands, except per share data) |
Historical 28/2/2009 |
Ordinary Proceeds |
ZDP Redemption (1) |
New ZDP's Sold |
Loss on FX Contract |
Estimated Expenses |
Pre- Share Consolidation Pro Forma 28/2/2009 |
Post- Share Consolidation Pro Forma 28/2/2009 |
|
Total Assets |
$440,645 |
$155,791 |
$(104,355) |
$16,530 |
$(27,256) |
$(6,700) |
$474,655 |
$474,655 |
|
- Liabilities |
(437) |
(437) |
(437) |
|||||
|
- ZDP Shares (2) |
(183,224) |
(110,386) |
(72,838) |
(72,838) |
||||
|
Net Asset Value ("NAV") (3) |
$256,984 |
$401,380 |
$401,380 |
|||||
|
Ordinary Shares Outstanding |
97,528 |
227,565 |
|
325,093 |
65,019 |
|||
|
NAV per Ordinary Share |
$2.63 |
$1.23 |
$6.17 |
|||||
(1) Of the 45.7 million ZDP shares that were outstanding prior to the ZDP redemption, 29.7 million ZDP shares were redeemed with the remaining 16.0 million ZDP shares being rolled over.
(2) Historical 28/2/2009 amount includes forward currency derivative contract.
(3) Per JZCP Board.
The data presented below assumes that the actions described above had occurred on 28 February 2009.
Pro Forma Net Asset Value
For the three months ended 31 May 2009, JZCP's NAV increased by $13.2 million or 3.3%.
|
28/2/2009 |
31/5/2009 |
|
|
Net Asset Value ($000's) (1) |
$401,380 |
$414,605 |
|
Number of Ordinary Shares (000's) |
65,019 |
65,019 |
|
Net Asset Value per Ordinary Share ($) |
$6.17 |
$6.38 |
(1) Per JZCP Board.
Pro Forma Balance Sheet
Below is a summary of JZCP's balance sheet as of the relevant dates:
|
($000's) |
28/2/2009 |
31/5/2009 |
|
Cash |
$138,739 |
$138,386 |
|
Listed Equities |
47,264 |
50,572 |
|
Listed Debt |
28,215 |
30,798 |
|
Private Investments |
258,421 |
266,617 |
|
Other Assets (1) |
2,016 |
1,570 |
|
Total Assets |
$474,655 |
$487,943 |
|
- Liabilities |
(437) |
(500) |
|
- Zero Dividend Preferred Shares |
(72,838) |
(72,838) |
|
Net Asset Value |
$401,380 |
$414,605 |
(1) Includes accrued dividends on Listed Equities.
For the three months ending 31 May 2009, our listed equities increased 7.0%. Our listed bank debt, both first and second lien investments, increased by 9.2%, led by a 13.0% increase in first lien loans. Our mezzanine investments increased by 5.7%, while the micro-cap portfolio increased 1.7%. Note that of the 20 mezzanine and micro-cap investments, 18 are current on their interest payments at 31 May 2009.
Portfolio
At 31 May 2009, the Company's investment assets consisted of 44 investments totaling $486.7 million broken out as follows:
|
Number of Investments |
% of Portfolio Valuation as of 31/5/09 |
|
|
Micro-Cap Portfolio |
8 |
33.1% |
|
Cash |
28.4% |
|
|
Mezzanine Investments |
12 |
15.4% |
|
Listed Equity |
3 |
10.5% |
|
Legacy Portfolio |
11 |
6.3% |
|
Bank Debt |
10 |
6.3% |
|
Total Investment Assets |
44 |
100.0% |
45.2% of the portfolio is invested in "liquid" assets, which consist of cash, listed equity, and listed debt. These asset classes are valued at third party listed prices. Cash is mainly deposited with HSBC and JPMorgan. 54.8% of the portfolio is invested in private investments in micro-caps or mezzanine investments. These investments are valued at fair value by the JZCP Board of Directors. As a point of reference, the average purchase multiple of the micro-cap investments was 6.0x. The current average enterprise multiple used at 31 May 2009 was 6.0x.
At 31 May 2009, 65.9% of the JZCP investments were valued below cost, and 34.1% were valued at or in excess of cost.
The top ten investments as of 31 May 2009 were as follows:
|
($000's) |
Asset Category |
Original Cost |
Valuation as of 28/2/2009 |
% of Portfolio Valuation as of 28/2/09 |
Valuation as of 31/5/2009 |
% of Portfolio Valuation as of 31/5/09 |
|
|
Accutest Holdings, Inc. |
Micro-cap |
$31,516 |
$35,947 |
10.8% |
$36,585 |
10.5% |
|
|
Safety Insurance Group, Inc. |
Listed Equity |
6,816 |
36,218 |
10.9% |
36,276 |
10.4% |
|
|
Continental Cement Company, LLC |
Mezzanine |
20,660 |
20,990 |
6.3% |
24,595 |
7.1% |
|
|
Dental Services Group, Inc. |
Micro-cap |
19,854 |
24,093 |
7.2% |
24,164 |
6.9% |
|
|
BG Holdings, Inc. |
Micro-cap |
21,332 |
19,819 |
5.9% |
21,629 |
6.2% |
|
|
Wound Care Solutions, LLC |
Micro-cap |
39,595 |
19,628 |
5.9% |
19,976 |
5.7% |
|
|
Petco Animal Supplies, Inc. |
Listed Debt / Mezzanine |
19,463 |
19,575 |
5.9% |
19,773 |
5.7% |
|
|
Dantom Systems, Inc. |
Micro-cap |
18,716 |
18,432 |
5.5% |
18,659 |
5.4% |
|
|
GHW Holdings, Inc. |
Micro-cap |
7,467 |
15,367 |
4.6% |
15,351 |
4.4% |
|
|
Sechrist Industries, Inc. |
Micro-cap |
5,829 |
14,553 |
4.4% |
14,516 |
4.2% |
|
|
Top Ten Investments |
$191,248 |
$224,622 |
67.4% |
$231,524 |
66.5% |
||
|
Remaining Investments |
196,579 |
109,278 |
32.6% |
116,796 |
33.5% |
||
|
Total Portfolio |
$387,827 |
$333,900 |
100.0% |
$348,320 |
100.0% |
||
The portfolio is diversified across the following business sectors:
|
Number of Companies |
% of Portfolio Valuation as of 31/5/09 |
|
|
Health Care Equipment & Services |
7 |
27.9% |
|
Support Services |
10 |
22.5% |
|
House, Leisure & Personal Goods |
6 |
12.3% |
|
Financial General |
4 |
10.8% |
|
Industrial Engineering |
7 |
8.6% |
|
Construction Materials |
4 |
11.7% |
|
Other |
6 |
6.2% |
|
Total Portfolio |
44 |
100.0% |
Material Events and Transactions
In the three months ending 31 May 2009:
The Company invested $1.5 million of additional preferred stock in BG Holdings, Inc. to support certain capital purchases.
The Company invested $2.8 million of Senior Subordinated Notes in Continental Cement Company, LLC.
The Company recorded a $17.1 million loss on a forward currency derivative contract.
About JZCP
JZCP is a closed ended investment company incorporated in Guernsey. The Company's corporate objective is to create a portfolio of investments in businesses primarily in the United States providing a superior overall return comprised of a current yield and significant capital appreciation. The Company's strategies include investments in micro-cap buyouts, mezzanine loans (sometimes with equity participations) and high yield securities, senior secured debt and second lien loans and other debt and equity opportunities. The Company's Ordinary Shares and Zero Dividend Preferred Shares are listed on the London Stock Exchange.
Enquiries
Company Secretary
Butterfield Fulcrum Group (Guernsey) Limited
2nd Floor, Regency Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 3NQ
Tel. +44 1481 720321
Fax. +44 1481 716117
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