JZCP Jz Capital Partners Limited

JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP")
(a closed-ended investment company incorporated with limited liability under the laws of Guernsey with registered number 48761)
LEI 549300TZCK08Q16HHU44

Further Update in relation to Secondary Sale and

Monthly Net Asset Value

23 June 2022

Secondary Sale

JZ Capital Partners Limited, the London listed fund that has investments in US and European microcap companies and US real estate, is pleased to provide a further update in relation to its interest in the Secondary Fund, JZHL Secondary Fund LP and to its announcement made on 23 May 2022.

In that announcement, the Company provided an update that a portfolio company of the Secondary Fund had executed an agreement to sell certain of its interests with completion of the sale being subject to the satisfaction of certain conditions, including the federal premerger notification program established by the Hart-Scott-Rodino Act.  The sale concerned the disposal of a portion of the Secondary Fund's interest in the portfolio company, Testing Services Holdings, and the Company is now pleased to announce that the conditions to the sale have been satisfied and that the sale has completed.  As a result, the Company has received a distribution from the Secondary Fund of approximately US$96.2 million.

The sale of a portion of Testing Services Holdings and the resultant distribution received by the Company corresponds to a NAV uplift to JZCP of approximately 59 cents per Ordinary Share of the Company based on the 30 April 2022 valuation and an approximately 70 cents uplift compared to the 28 February 2022 valuation reflected in the Company's annual results.  In addition and as previously announced, the Company having now received such distribution is expected to be able to fund its obligation to redeem its zero dividend preference shares due on 1 October 2022, subject to compliance with the financial covenants of the Company's Senior Facility provided by WhiteHorse Capital Management, LLC due on 26 January 2027 and the extension of the maturity of the Subordinated Notes made available by Jay Jordan and David Zalaznick (and their affiliates) due on 11 September 2022.  It had previously been indicated that when the Company had sufficient cash to redeem the zero dividend preference shares such an extension would be negotiated and, accordingly, the Company intends to seek to negotiate such an extension to the maturity of the Subordinated Notes.

JZCP’s remaining interest in the Secondary Fund, following completion of the sale of a portion of Testing Services Holdings, is valued at approximately US$75.4 million.  As previously announced, the Company will also make further announcements in relation to any further distributions of the Secondary Fund (and in particular concerning any distributions as a result of its interest in the Secondary Fund) as and when appropriate and once further information becomes available to it.

Monthly Net Asset Value ("NAV")

The unaudited Net Asset Value per Ordinary Share of the Company as at the close of business on 31 May 2022 was as follows:

JZCP’s NAV at 31 May 2022 is US$4.85 per Ordinary Share (US$4.36 per Ordinary Share at 30 April 2022), the increase in NAV of 49 cents per Ordinary Share is due to net investments gains of 48 cents (59 cents Secondary Fund uplift less 11 cents other portfolio write downs), investment income of 1 cent, net fx gains of 2 cents offset by expenses and finance costs of (2) cents.

Below is a summary of the Company's assets and liabilities at 31 May 2022, together with a pro forma summary of the same at 23 June 2022 which includes the above described distribution received by the Company from the Secondary Fund.  As at 23 June 2022, the Company has cash and cash equivalents of approximately US$136 million.

Unless otherwise defined herein, capitalised terms used in this announcement have the meanings given to them in the announcements of the Company dated 23 May 2022 and 7 April 2022 (as applicable).

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Important Notice

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements relate to matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, policies and the development of its strategies may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the investment performance, result of operations, financial condition, liquidity and policies of the Company and development of its strategies, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. These forward-looking statements speak only as at the date of this announcement. Subject to their legal and regulatory obligations, each of the Company, Jordan/Zalaznick Advisers, Inc. and their respective affiliates expressly disclaims any obligations to update, review or revise any forward-looking statement contained herein whether to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based or as a result of new information, future developments or otherwise.