Secondary Equity Issue

RNS Number:8461T
ACP Mezzanine Ltd
07 May 2008


                                 ACP Mezzanine

                   Intention to raise further equity capital

7 May 2008

ACP Mezzanine Limited ("ACP Mezzanine" or the "Company": ACPM.LN), the
closed-ended investment company focused on lending to European small and
medium-sized enterprises ("SMEs"), is pleased to announce its intention to raise
approximately Euro150 million via a secondary equity issue in order to support its
strong pipeline of investment opportunities. In line with the Company's stated
objectives, all of the identified investment opportunities relate to
non-investment grade financing of SME businesses, primarily within its core
markets. Completion of these investments is expected to enhance significantly
its prospective earnings and dividends. (note 1)

As at closing 2 May 2008, ACP Mezzanine's pipeline of advanced stage investment
/ underwriting opportunities, which it intends to complete prior to 30 June
2008, amounted to circa Euro350 million in total volume of assets. Such
opportunities reflect the excellent market conditions from both an origination
and pricing standpoint currently in the markets in which ACP Mezzanine is an
active participant. These opportunities, for which ACP Mezzanine expects on the
whole to receive upfront underwriting fees, primarily include:

* A joint funding opportunity with Conpair AG, a leading German corporate
  consultant for SME financial products. ACP Mezzanine and Conpair intend to 
  close and fund a c. Euro250 million portfolio of approximately 80 German SME 
  mezzanine loan assets, in conjunction with c. Euro 210 million of senior debt 
  being put in place;

* Providing Euro40 million in a committed funding line to Leasecom, a French
  leasing business and one of the origination platforms of ACP Mezzanine's
  investment manager, ACP Capital Limited ("ACP Capital": APL.LN). This line is
  expected to grow to Euro100 million over a year and, as it grows, a senior 
  portion will be syndicated; and

* A further c. Euro30 million of small loans (average size c. Euro5 million),
  spread across a range of industries and geographies, sourced either directly
  through ACP Capital or indirectly through ACP Capital's network of origination
  platforms, including GCI Management AG ("GCI").

In order to optimize these opportunities, ACP Mezzanine intends to utilize its
existing committed leverage facilities which amount to Euro150 million, the
abovementioned senior funding for the Conpair portfolio and a further
uncommitted funding line, which is currently under advanced discussions. The
uncommitted funding line is expected to have a margin of 225bps over 3-month
Euribor on a 50% advance rate. This is consistent with senior debt pricing being
put in place in the current market. Although the portfolio is currently only c.
40% leveraged, funding the above pipeline will increase leverage towards but not
over the Company's stated maximum limit of 70%.

ACP Mezzanine expects to earn a post-leverage return on equity in excess of 20%
across the portfolio of identified opportunities. Together with its existing
investments, ACP Mezzanine anticipates achieving, by the fourth quarter of 2008
and on a post-leverage basis, an annual dividend yield in excess of 15% based on
a theoretical issue price of Euro0.80 per share for the intended capital raise.

It is intended that existing investors will receive an interim dividend in
parallel to the capital raise.

The Company is in advanced discussions on a further pipeline of investment
opportunities amounting to circa Euro1 billion that are projected to produce a
further portfolio of Euro300 to Euro400 million which could close as early as fourth
quarter of 2008. These potential transactions are in part derived from ACP
Capital's network of strategic debt and equity platforms and partners including
Conpair, as well as from reverse enquiries initiated by several prominent
European commercial banks seeking to develop joint ventures with ACP Mezzanine.
The Company has therefore initiated discussions with these banks in order to
develop potential joint origination work flows within its core markets, with
such banks potentially providing senior debt funding lines as part of such joint
ventures. These opportunities include banks in the United Kingdom.

After receiving and evaluating approaches from a series of institutions to lead
the capital raise, ACP Capital, as investment manager to the Company, selected
Liberum Capital given its commitment to provide research and other capabilities
within this specialised area. ACP Capital has also entered into discussions with
Liberum in regards to becoming the Company's Nominated Adviser and joint broker,
alongside potentially another firm.

Collins Stewart Europe Ltd has in parallel resigned as Nominated Adviser and
Broker but will continue to provide these services until a replacement is found
or until the expiration of its notice period.

Commenting on the forthcoming capital raise, Derek Vago, CEO of ACP Capital,
commented: "Within two years of its launch, ACP Mezzanine has become one of the
leading non-investment grade lenders to European SMEs. We are now better
positioned than ever to move to the next level of growth and diversification.
The strength of our origination network, which provides a sustainable flow of
assets, combined with improved pricing conditions in our targeted markets, is
expected to enable us to exceed in 2008, a year in advance, our original three
year target of Euro550 million of assets under management and a dividend yield of
13% by the end of 2009 (as stated in the Company's Admission Document). The
proposed secondary equity issue will allow us to take better advantage of the
exciting investment opportunities that currently exist".


For further information on ACP Mezzanine, please visit www.acpcapital.com.

Note 1 (1) This statement should not be interpreted to mean the future earnings
per share of the Company, following completion of the secondary offering, would
necessarily match or exceed the historical earnings per share of the Company.


Enquiries:

Rob Bailhache & Nick Henderson, Financial Dynamics         [phone]
(Media Relations)

Sacha Macintosh, ACP Capital UK LLP                        [phone]

Chris Wells, Stewart Wallace, Collins Stewart              [phone]
(Nominated Advisor)

Simon Stilwell, Liberum Capital                            [phone]
(Placing Agent)


About ACP Mezzanine

ACP Mezzanine Limited (LSE AIM: ACPM) is a Jersey-incorporated, closed ended
investment company listed on AIM. It is a provider of sub-investment grade
finance to European small and mid-sized enterprises - with a primary focus on
the UK, France, Germany and Italy - originating, structuring and underwriting
the majority of its investments through ACP Capital Limited ("ACP Capital":
APL.LN) and ACP Capital's European network. ACP Mezzanine aims to optimise
risk-adjusted returns by actively managing its portfolio and to distribute at
least 85% of profits as dividends. ACP Capital Limited owns 47% of ACP Mezzanine
and, through a subsidiary, acts as its investment manager.



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

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