(Alliance News) - JZ Capital Partners Ltd published its delayed half-year results on Wednesday and said it has put its US micro-cap assets on sale, in order to reduce debt.
The fund, which invests in US and European micro-cap companies and US real estate, said during the six-month period ended August 31, its net asset value per share declined to USD9.66 from USD10.04 on February 28. Total net asset value dropped to USD748.2 million from USD810.2 million.
In October the company had delayed the release of interim results as it needed to revalue certain existing real estate investment, and said at the time it expected the aggregate reduction in valuation to be in the range of USD50 million to USD150 million.
Following a report received from an independent third-party appraiser, the company said the net movement in unrealized losses between the fair value and costs of JZCP's real estate investment between February 28 and August 31 totalled USD64.0 million, largely due to the carrying costs of the portfolio.
The fair value of JZCP's real estate investments at August 31 decreased to USD422.7 million from USD443.0 million at February 28.
The company said it believes that significant uncertainty remains as to whether the real estate portfolio could be realized at these values.
JZ Capital said its expecting to raise USD150 million to USD170 million by selling select US micro-cap assets, prioritizing debt repayment over the return of capital to shareholders. The money will be used to pay down a "significant amount of debt in the near future".
David Macfarlane, chair of the company said: "The company remains focused on implementing its revised investment policy; however, due to potential provisions against the real estate portfolio, the company must protect its balance sheet in the near term by prioritizing debt repayments over the return of capital to shareholders."
"Consequently, new capital allocations will be largely limited to follow-on investments in existing portfolio companies as well as other existing obligations," Macfarlane said.
Following the half-year report, JZ Capital said that Non-Executive Director Chris Waldron retired from the company with immediate effect, after spending over six years on the board.
JZ Capital shares were down 4.6% in London at 336.00 pence each on Wednesday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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Jz Capital (JZCP)