Jz Cap. Zdp2022 Discussion Threads

[spectoacc] 14/2/2022 09:31

Sold at £4.065, nicely inside. Had wanted to run to the 2022 redemption, and see little reason they won't pay out, but don't think the market is remotely pricing in the dire consequences if Russia invades Ukraine, and want out of some of the least liquid. Made the mistake in 2008 & 2020 of being caught in some things that were unsellable, even if they turned out fine.

Good luck those holding.

[davebowler] 04/8/2021 09:56

JZCCs now repaid at £10.Phew!

[davebowler] 22/7/2021 16:07

re.JZCC email from AJ Bell-
As per the terms of the bond, the JZ Capital Partners 6% CNV SUB 30/07/21 will mature on 30 July 2021. This means that you will receive cash in exchange for your bond.

For details about the bond, including the maturity date, please copy and paste the below link into your web browser:
hxxp://www.jzcp.com/media/113479/JZCP-KID-CULS-31Dec2020.pdf

The cash from the maturity will be credited to your account on or around 30 July 2021. You will receive GBP10 in exchange for each share held.

[davebowler] 19/5/2021 10:28

Liberum;
Light at the end of the tunnel

Mkt Cap £98m | Share price 126.5p | Prem/(disc) -58.1% | Div yield n/a

Event

JZCP's NAV per share at 28 February 2021 was $4.25 per share (February 2020: $6.14), representing a decline of 30.8% over the year. The main driver of the NAV decline was revaluation losses on the real estate portfolio (26% NAV impact) in the first half of the year, partially offset by gains of 2.2% from the micro-cap portfolio.

The US and European micro-cap portfolios have been relatively stable. The portfolios comprise a total of 35 companies across 11 industries. As previously reported, JZCP completed a secondary sale of US micro-cap assets in December for $90m. The real estate portfolio is still held at the last appraised value from August 2020. Most of the equity in the company's real estate projects has been written down to zero in the first half of the financial year.

Progress with disposals has enabled an improvement in the company's debt position although there is still plenty to be done. Earlier this week, JZCP reported that it had reached an agreement with its senior lender to extend the term on the debt to June 2022. The company will fully redeem the CULS and has also agreed a $31.5m facility provided by principals of the investment manager. Several realisations are expected over the coming 12 months which should help to de-gear the balance sheet further.

Liberum view

The outlook for JZCP has improved considerably in the second half of the financial year. The disposal of the Micro-Cap portfolio provided much-needed liquidity and has helped to stabilise the balance sheet. Given the level of asset cover, the ZDP holders should expect a full return of capital but this may require an extension to the maturity date (October 2022). Most of the investments are minority position. The manager is not in control of the exit process and is ultimately reliant on the cooperation of partners to achieve realisations, leading to the potential for a lengthy exit process.

[spectoacc] 15/4/2021 08:43

JZCP finally seeing some NAV rises, helping the shares, and helping these JZCP's. Still expecting a decent payout & market to recognise them once the mid-2021 LIBOR+11% debt gets repaid.

Edit - getting £3.47 to sell, £4.10 to buy, but it's still a daft spread - 3.22/4.20 on L2.

[spectoacc] 10/11/2020 13:28

Someone taken 10k at £3.50, full offer.

[spectoacc] 05/11/2020 12:05

11%! Still expecting payout on these tho, as clearly are the Ords.

[davebowler] 05/11/2020 09:58

Liberum;
Event

JZCP's NAV per share at 31 August 2020 was $4.60 per share (February 2020: $6.14), representing a decline of 25% over the prior six months. The main driver of the NAV decline in the period was revaluation losses on the real estate portfolio (24% NAV impact), partially offset by gains of 1.3% from the micro-cap portfolio.

The real estate portfolio is now valued at $47m, compared to $159m in February 2020. Over the last 18 months, the valuation of the real estate investments have fallen by 90% ($443m in February 2019 plus an additional $44m has been invested). Most of the equity in the real estate projects has been written down to zero. The real estate projects mainly comprise projects in Brooklyn and Miami.

Progress has been made with asset disposals which will help to reduce leverage. $141m of sales have been agreed since 1 March. This includes the disposal of part of the US micro-cap portfolio for $90m (plus an additional $20m in unfunded commitments) in a related party transaction. The sale will enable the repayment of $83m of Guggenheim's senior debt facility. An amendment to the facility has been agreed following a breach of the asset coverage covenant.

The US micro-cap portfolio performed relatively well given the challenging backdrop. The portfolio comprises 22 businesses across seven industries. The average valuation multiple of 8.5x EBITDA (18% discount to public comparables).


Liberum view

The disposal of the Micro-Cap portfolio provides much-needed liquidity and has helped to stabilise the balance sheet. The company is still in a difficult position with the senior loans and CULS maturing in mid-2021. The timeframe for a return of capital for shareholders is likely to be fraught with difficulty and it is imperative that further disposals are achieved to mitigate cost leakage. For example, $40m of the senior loan facility is now charging interest at Libor +11% following the facility amendment. The company also does not control many of the investments and is reliant on the cooperation of partners to achieve realisations

[spectoacc] 17/9/2020 13:01

Thanks @davebowler. Liberum reads very negative, more negative then I (or the market - shares are unmoved) read it.

[davebowler] 17/9/2020 10:25

Liberum;
Real estate writedowns will result in covenant breach

Mkt Cap £69m | Prem/(disc) -76.3% | Div yield n/a

Event

JZ Capital Partners expects to write down the value of its real estate assets by $80m-$100m at the August 2020 interim report. This follows the receipt of updated appraisals for the impact of Covid-19. The company has not yet received appraisals on all of the real estate assets.

As a result, JZCP will require a waiver under its senior facility with Guggenheim Partners as it will be in breach of its minimum asset coverage ratio. The board expects to receive a waiver from Guggenheim. The company will not be able to make the interest payment due on the CULS at the end of September without this waiver. The company is in discussions to amend the current loan arrangements and expects to pay down a substantial portion of the senior debt facility through a secondary sale of US micro-cap assets in the near term.

Liberum view

The writedown will reduce NAV by a further 17-21%. The loss on the real estate portfolio over the last 18 months is staggering. The assets mainly comprise development projects in Brooklyn and Miami. Further heavy losses are inevitable given the leverage within the structures. The portfolio was valued at $443m at 29 February 2019. The company invested a further $43.6m in the assets and the overall value is now estimated to be $59m-$79m (84% to 88% decline based on the range provided today).

The timeframe for a return of capital for shareholders is likely to be fraught with difficulty. Debt needs to be repaid first and JZCP has c.$264m of debt outstanding including loans, convertible bonds and zero dividend preference shares. The company's debt matures between 2021 and 2022. The Guggenheim debt has a minimum collateral value covenant of 4x. We estimate the ratio will be 3.8x following the writedown. The company's leverage ratio continues to rise and debt to equity ratio is c.70%. The company also does not control many of the investments and is reliant on the cooperation of partners to achieve realisations.

[spectoacc] 17/9/2020 07:10

As expected, more bad news on the property side, another c.$100m to come off NAV, covenant waivers needed.

But for once some minor good news:

"Separately, the Company is pleased to report that its US micro-cap
portfolio is performing quite well and positive progress is being made in
relation to the previously announced secondary sale of certain of its US
micro-cap assets. It is anticipated that the Company will reach an agreement in
the near term on the secondary sale and an announcement will follow. The
secondary sale if completed will provide the Company with the needed liquidity
to repay a substantial portion of its senior debt. The Company remains
committed to its strategy of realising value from its investment portfolio, and
to paying down debt in the first order"

[spectoacc] 16/9/2020 16:39

Ha ha not huge, as the title to the thread possibly suggests ;)

Got well inside on purchase at least, & expecting a return before 2022.

[skyship] 16/9/2020 11:41

Good luck Specto. I assume not a very large allocation!

[spectoacc] 11/9/2020 15:46

"The Board of JZ Capital Partners Limited ("JZCP" or the "Company"), the London listed fund that invests in US and European micro-cap companies and US real estate......announces a proposed change to the Company's investment policy.

Under the proposals, the Company will make no further investments except in respect of which it has existing obligations or to the extent that investment is required to support existing investments. The intention is to realise the maximum value of its investments and, after repayment of all debt, to return capital to shareholders."


Hoping for early repayment on JZCZ, before 2022 - assuming, of course, enough is raised to cover the two debts ahead of them. The shares imply there is.