Jz Capital Partners Share Discussion Threads

[johntobin] 26/4/2022 09:05

Sounds like plenty of investors are still fearful... good,
I made some money on a spread bet of the zeros, which did re-rate; so rolling over into the ordinary shares.
With the toxic property gone the discount looks attractive. The NAV of these split capitals can seem to evaporate as they head to wind up but the discount just looks to wide and providing the wider market holds up I think there will be significant upside.

[cousinit] 14/4/2022 18:43

I suspect given the history here that it will only meaningfully re-rate when there is a tangible prospect of a cash return. They have shown multiple times that reported NAV is meaningless...

[topvest] 13/4/2022 19:40

I'm not going to be investing any more as I am not that confident. Just hoping to get some return on a poor investment a few years ago.

[johntobin] 13/4/2022 17:42

My thoughts entirely.
Greedy when others are fearful?

[topvest] 13/4/2022 15:18

Yes, a high risk disaster stock but could be a good return eventually from this level.

[johntobin] 13/4/2022 08:34

The discount on the Ordinaries looks attractive. The secondary sale in october 2020 looks like it may still deliver $70million from my reading of the RNS.
There are clear risks given the gearing but if the market holds up I think we could see a significant re-rating, possibly after the annual report?

[grahamg8] 07/4/2022 06:55

Sticky fingers

[grahamg8] 07/4/2022 06:54

Refreshingly detailed and understandable RNS. However it's still jam tomorrow.

[topvest] 21/3/2022 10:14

Yet more bad news, albeit it doesn't seem to impact NAV. Sort of reinforces the tangled web of wrongdoing at this company.

[stemis] 24/6/2021 07:58

What is the redemption value of the ZDPs - 483p?

Edit: Ok, I've found the document. It's actually 483.70p

Presumably if there is an extension the company would have to offer the holders some sort of increased redemption value?

[davebowler] 21/6/2021 08:46

Liberum;
JZ Capital Partners

Balance sheet de-gearing continues with Salter Labs disposal

Mkt Cap £95m | Share price 122.5p | Prem/(disc) -60.0% | Div yield n/a

Event

JZ Capital Partners completed the sale of its interests in Salter Labs. Net proceeds from the sale are $41m, 9% ahead of the latest book value of $37.6m. Further proceeds of $0.75m have been placed in escrow and may be received, depending on the certain closing adjustments.

JZCP will use $33m to repay part of its senior lending facility. The remaining balance under the facility following the repayments will be $35m.

Liberum view

Progress with disposals has enabled an improvement in the company's debt position. The senior lending facility has been extended to June 2022, albeit the cost on the remaining debt is Libor +15%. JZCP will fully redeem the CULS in July 2021 and has also agreed a $31.5m facility provided by principals of the investment manager. 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 positions. The manager is not in control of the exit process and is ultimately reliant on the cooperation of partners to achieve realisations.

[spectoacc] 19/5/2021 10:33

"..The ZDP holders should expect a full return of capital but this may require an extension to the maturity date (October 2022"

Hoping for no extension, but seems a fair comment.

[davebowler] 19/5/2021 09:26

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] 17/5/2021 07:13

Market seems OK with it. Pays off the CULs, at cost of 6% interest and continued uncertainty, but with the prospect of clearing the new debt, and the Zeros, with asset sales.

[grahamg8] 17/5/2021 06:47

Very complex refinancing arrangement. It does keep the company afloat but only for another year. Not enough cash to pay off the zeros, so there is a good chance of another refinancing next year. Each time the shareholders slice of the pie gets smaller. The NAV premium is pretty meaningless all the time the sharks are circling.

[fuzzyneil] 16/4/2021 14:55

I hear you brother!!! :.)

[raptor_fund] 16/4/2021 14:31

Now all I need is them to have enough cash to pay off that reasonably priced zero dividend preference share sitting at a 25% discount and 2x cover.

[fuzzyneil] 14/4/2021 10:45

And they've almost enough cash now to pay off the horribly expensive debt facility due in Jun.

[davebowler] 05/11/2020 09:56

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

[fuzzyneil] 23/10/2020 11:41

Good to see the senior debt nearly halved. I've assumed that the jzcz were affected by the same negative sentiment as the ordinary shares, despite their cover ratio. So I've held on to mine. It would be good to see updated nav now to recalculate updated ratio.

[rooky4] 23/10/2020 11:11

From the latest announcement for quick reference:

"For completeness, the Company notes that following completion of the Secondary Sale and use of any proceeds therefrom and other recent sales to make the repayment of US$70 million to the existing lenders under the Amended Senior Facility, the company’s approximate key debt obligations will be as follows:
(i) senior debt of approximately US$80 million pursuant to the Amended Senior Facility (due 12 June 2021), (ii) CULS of approximately £38.9m (due 30 July 2021), and (iii) the Company's Zero Dividend Preference Shares of approximately £57.6m (due 1 October 2022)."
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The zeros are on 31% discount to NAV: Ords get nothing until zeros are fully paid, so anyone holding Ords must believe the CULS and zeros will be paid in full?
Somebody's wrong!

[spectoacc] 20/10/2020 05:49

@topvest - must admit I've no JZCP, all my interest is via JZCZ, & the more they sell, the better :)