Interim Management Statement

RNS Number : 0948V
JZ Capital Partners Ltd
03 July 2009
 



  JZ CAPITAL PARTNERS LIMITED

(Registration No. 48761)

Registered Office:

2ND FLOOR, REGENCY COURT, GLATEGNY ESPLANADE, ST. PETER PORT,

GUERNSEYGY1 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






$1.2

$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 wa6.0x.


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 endin31 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

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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