Largest Investment & 8th Mandatory Redemption

RNS Number : 9297I

JPEL Private Equity Limited

17 December 2020

 

JPEL Private Equity Limited

Ground Floor

Cambridge House

Le Truchot, St Peter Port

Guernsey, GY1 1WD

www.jpelonline.com

JPEL ANNOUNCES COMPLETION OF TRANSFER OF LARGEST INVESTMENT

AND EIGHTH MANDATORY REDEMPTION TO US$ SHAREHOLDERS

· MBI REPRESENTED 33.05% OF 30 SEPTEMBER 2020 NAV

· JPEL WILL RETURN $75 MILLION TO SHAREHOLDERS

· REDEMPTION DATE 29 DECEMBER 2020

· REDEMPTION REPRESENTS 36.08% OF US$ EQUITY SHAREHOLDER NET ASSET VALUE AT 31 OCTOBER 2020

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GUERNSEY, 17 DECEMBER 2020

The Board of Directors of JPEL Private Equity Limited ("JPEL" or the "Company") is pleased to announce the completion of the transfer of its indirect minority interest in MBI Holding, Inc. ("MBI" and the "Transaction") and JPEL's eighth capital distribution in respect of the Company's US$ Equity Share class ("Mandatory Redemption").

The Company's indirect interest in MBI is the Company's largest investment representing approximately $65.0m of the Company's NAV. The Transaction is being completed at an 8.5% premium to that valuation.

Details of the Transaction

Various funds managed by Fortress Investment Group ("FIG") affiliates owned, together with the JPEL investment, approximately 87% of MBI (together with JPEL those funds being the "Selling Shareholders"). Pursuant to JPEL's investment strategy, FCF JPEL Management LLC, a FIG affiliate, continues to effect an orderly realisation of the Company's investments in order to maximise returns to US$ Equity Shareholders. JPEL's Directors are focused on shareholder value as well as the Company's realisation strategy and the related timetable. The Directors considered this when reviewing the transaction alongside the third party fairness opinion and third party valuation information.

The Selling Shareholders have transferred their interest in MBI to a newly established investment vehicle ("Purchaser") managed by FIG affiliates, which was partially capitalised by three third party private equity investors who are participating in the Transaction through a new fund ("New MBI Fund") managed by FIG affiliates and raised following a placement agent led marketing process, along with other existing funds managed by FIG affiliates. As agreed with the third party private equity investors in connection with the Transaction, the FIG co-portfolio managers responsible for the management of JPEL, Greg Getschow and Troy Duncan (the "Related Parties"), will also personally invest in the Transaction. The manager of the New MBI Fund is entitled to receive the same management fee rate per annum that FCF JPEL Management LLC receives pursuant to its investment management agreement with JPEL.

Pursuant to Listing Rule 11.1.4R (4), persons exercising significant influence constitute related parties of the Company and as such the Company has deemed the Related Parties, as joint portfolio managers, to be related parties of the Company. Additionally, pursuant to LR 15.5.4 R, FIG, as the Company's investment manager is considered a related party of the Company. The Transaction, in so far as it relates to each of the Related Parties, is a "smaller related party transaction" for the purposes of Listing Rule 11. Accordingly, the Company has obtained written confirmation from a Sponsor in accordance with the requirements of LR 11.1.10 (2)(b) that the terms of the Transaction are fair and reasonable as far as the shareholders are concerned. The Related Parties have agreed to invest a combined total of approximately $4.9 million in the Transaction.

The Board of JPEL has approved the terms of the Transaction following the receipt of the fair and reasonable confirmation from the Sponsor and also the review of a third party independent fairness opinion.

Eighth Mandatory Redemption

The Company has resolved to return a total of $75 million to JPEL US$ Equity Shareholders. Redemption proceeds will be comprised of existing cash on JPEL's balance sheet and proceeds from the sale of the indirect interest in MBI. 

The $75 million capital return (the equivalent of approximately 46.6 million US$ Equity Shares, or 36.08% of US$ Equity Shareholder NAV) will be by way of a pro rata compulsory redemption of US$ Equity Shares at a price equal to the prevailing NAV per US$ Equity Share of $1.61 as at 31 October 2020 (being the most recent NAV per US$ Equity Share available as of the date of this announcement) for US$ Equity Shareholders on the register of members as at close of business on 29 December 2020 ("Record Date"). Unless circumstances require otherwise, this NAV will form the NAV per US$ Equity Share as of the date of redemption.

Payments of redemption proceeds are expected to be effected either through CREST (in the case of shares held in uncertificated form) or by cheque (in the case of shares held in certificated form) on or around 8 January 2021. Any share certificates for the balance of holdings of shares will also be despatched to shareholders on or around 8 January 2021.

The Company currently has 129,101,529 US$ Equity Shares in issue. All of the US$ Equity Shares redeemed on the redemption date will be cancelled and any fractions of shares will be rounded down to the nearest whole share.

The US$ Equity Shares will be disabled in CREST on the Record Date and the existing ISIN number GG00BMDQPC56 (the "Old ISIN") will expire. A new ISIN number GG00BNDVXN48 (the "New ISIN") in respect of the remaining US$ Equity Shares which have not been redeemed will be enabled and available for transactions on 30 December 2020. For the period up to and including the Record date, US$ Equity Shares will be traded under the Old ISIN and as such, a purchaser of such shares may have a market claim for the redemption proceeds following the activation of the New ISIN. CREST will automatically transfer any open transactions as at the redemption date to the New ISIN.

Inclusive of this Mandatory Redemption, JPEL will have returned $414.2 million to US$ Equity Shareholders, or approximately 86.5% and 108.9% of the Company's 31 October 2016 NAV and market capitalization. Please note that the prevailing NAV at the time of the Company's first mandatory redemption was 31 October 2016. 

DIRECTOR'S INTERESTS

As of 17 December 2020, Sean Hurst, Christopher Spencer and Tony Dalwood, Directors of the Company, owned 9,521, 11,487 and 48,798 US$ Equity Shares, respectively. As a result of the Mandatory Redemption described above, Sean Hurst, Christopher Spencer and Tony Dalwood are expected, immediately following the redemption date, to hold approximately 6,086, 7,343 and 31,191 US$ Equity Shares, respectively.

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Notes: This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

LEI Number: 5493005M6GBE3DNJZ894

About JPEL Private Equity Limited

JPEL Private Equity Limited is a Guernsey registered and incorporated, London Stock Exchange-listed, closed-ended investment company (LSE: JPEL) designed primarily to invest in the global private equity market. The investment objective of the Company is to achieve both short and long-term capital appreciation by investing in a well-diversified portfolio of private equity fund interests and by capitalising on the inefficiencies of the secondary private equity market. 

ENQUIRIES:

FCF JPEL Management LLC

[e-mail]

 

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