2 Feb 2018 07:00
2 February 2018
SQN Asset Finance Income Fund Limited
Update on Snoozebox Investment
SQN Asset Finance Income Fund Limited (the "Company"), the leading diversified equipment leasing fund listed in the UK, is pleased to announce that it has signed conditional agreements transferring the ownership of Snoozebox Limited ("Snoozebox" or the "Lessee"), by effecting its purchase from the Administrator and onward sale to a new owner which is part of a well-capitalised group experienced in the wider modular accommodation and in the oil and gas industries. Snoozebox, under its new ownership, will then enter into a new operating lease with the Company.
As highlighted in the Company's annual results for the year ended 30 June 2017, a restructuring solution was being considered which better suited the long-lived nature of the mobile, modular building assets and was expected to deliver cash flows suited to an amortising lease structure. A satisfactory restructuring solution with the prior management of Snoozebox was not possible and therefore the Company agreed terms with the new owner, who is committed to taking the business forward. The purchase and onward transfer has taken more than two months as the Administrators of the Lessee have sought to achieve the best outcome for creditors (including the Company), which has ultimately resulted in the Administrator agreeing to negotiate the terms of the sale with SQN Capital Management ("the Investment Manager"), on behalf of the Company.
The terms of the new Snoozebox lease will reflect an operating lease, extending the term to 10 years with part fixed and part variable rentals. The Company's outstanding balance due from the Lessee is approximately £8.20m as at 26 January 2018. It is expected that the new lease will result in full amortisation of capital and payment of interest to the Company. Furthermore, this transaction will maintain the brand and retain the two existing contracts and deal pipeline developed by Snoozebox.
The transaction is conditional upon Snoozebox emerging from administration and creditors voting for a company voluntarily arrangement, expected by the end of March 2018.
Commenting on the Lessee transfer, Neil Roberts, the Investment Manager, said:
"There continues to be a strong market for the modular accommodation assets financed by the Company, which is confirmed by this transaction. This solution is a good example of how SQN can protect its investment, whilst retaining the integrity of the core business. We are confident this deal will ensure the longevity of the Lessee's business and result in full amortisation of capital and interest to the Company".
For further information please contact:
SQN Capital Management, LLC Neil Roberts Jeremiah Silkowski
| 01932 575 888 | ||||
Winterflood Securities Limited | 020 3100 0000 | ||||
Neil Langford Chris Mills
| |||||
| 020 7466 5000 |
Notes to Editor
The Company invests in equipment lease and asset finance arrangements across a diverse portfolio of assets and industries predominantly in the UK, Northern Europe and US. The Company focuses on business-essential, revenue-producing (or cost saving) equipment and other assets with high in-place value and long economic life relative to the investment term.
The Company's Investment Managers are SQN Capital Management, LLC, a Registered Investment Advisor with the United States Securities and Exchange Commission and its subsidiary, SQN Capital Management (UK) Limited. The principals responsible for managing the portfolio are Jeremiah Silkowski and Neil Roberts.