Placing & Open Offer

RNS Number : 6991S

JZ Capital Partners Ltd

22 May 2009

 



JZ Capital Partners Limited 

22 May 2009

For publication in the United Kingdom only. Not for release, publication or distribution into any other jurisdiction including the United States, Australia, Canada, the Republic of South Africa or Japan.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  The availability of the Ordinary Share Issue and the ZDP Proposals to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.

Proposed Placing and Open Offer to raise net proceeds of up to approximately US$147m (before expenses), a 1 for 1 Rollover of the Company's Zero Dividend Preference Shares and a Placing of New Zero Dividend Preference Shares (the 'Proposals')

Highlights 

The Board of Directors of JZ Capital Partners ('JZCP' or the 'Company'), today announces:

• A 7 for 3 non-underwritten placing and open offer at 42 pence resulting in the issue of up to 227,565,137 Ordinary Shares to raise approximately £95.6 million (US$147.2 million). 

• The Company has received irrevocable commitments to subscribe for 132,995,666 Ordinary Shares, to raise approximately £55.9 million (US$86.0 million)

• A 1 for 1 Rollover of existing Zero Dividend Preference shares into New ZDP Shares and a Placing and Offer for Subscription of up to 45,662,313 New ZDP Shares at 215.8p per share

• The New ZDP Shares will have a gross redemption yield of 8.0% and a term of 7 years, with minimum cover of 3.0 times at admission

The Board believes that the Proposals will enable it to:

• Satisfy the maximum potential redemption of the ZDP Shares on 24 June 2009 from existing cash balances and the net proceeds of the Placing and Open Offer

• Take advantage of new investment opportunies

As at 30 April 2009, the Company had cash deposits of approximately US$103.7 million. The total redemption cost (including the cost of an associated forward foreign exchange contract) of the ZDP Shares in issue is US$185.9 million. The minimum net proceeds of the placing and open offer, based on the level of irrevocable commitments received by the Company, and the existing cash balances will be sufficient to satisfy the total redemption cost.

In the absence of receiving the minimum net proceeds of the placing and open offer, the Company may be forced to realise assets in order to satisfy the total redemption cost of the ZDP Shares. The Board believes that, given the current financial and economic environment, the Company would not only sacrifice the benefit of the full potential of its existing portfolio investments if it was to dispose of them today, it is also highly likely the Company would be forced to dispose of the assets on significantly worse terms than it would expect to achieve in a better financial and economic environment.

David Macfarlane, Chairman of JZCP, said:

'These Proposals will ensure the Company is not forced into an accelerated sale of its existing investments to satisfy the ZDP redemption liability and will position the Company to take advantage of the many opportunities presented by current market conditions. 

'We are delighted to have already received commitments for US$86 million from existing shareholders, including the principals of the investment manager and a new investor'

This summary should be read in conjunction with the full text of this announcement. This announcement is not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except in the case of New ZDP Shares on the basis of the information in the ZDP Prospectus and in the case of Ordinary Shares on the basis of the information in the Ordinary Share Prospectus, in each case published by the Company in connection with the Proposals.

Contacts

JZ Capital Partners Limited	[phone]
David Macfarlane , Chairman
c/o Smithfield
Jefferies International Limited (Financial Adviser)	[phone]
Chris Snoxall
Oliver Griffiths
Smithfield	[phone]
Rupert Trefgarne
John Antcliffe

The Directors of JZ Capital Partners Limited are responsible for, and have taken all reasonable care to ensure that, the information contained in this document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect the import of such information.

Jefferies International Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as financial adviser, sponsor and broker to the Company in connection with the Proposals and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Jefferies, or for providing advice in relation to the Proposals or any other matters referred to in this announcement.

The US$/GB sterling exchange rate adopted throughout this document is 1.54, being the exchange rate as at 19 May 2009, the last practicable date prior to publication of this document.

PROPOSED PLACING AND OPEN OFFER OF ORDINARY SHARES, ROLLOVER OF EXISTING ZDP SHARES INTO NEW ZDP SHARES, THE CREATION AND ISSUE OF NEW ZDP SHARES

INTRODUCTION

The Board of Directors of JZ Capital Partners, today announces 

Placing and Open Offer to raise approximately $147 million (before expenses)

The placing and open offer is being made on the basis of 7 New Ordinary Shares for 3 every Ordinary Shares at 42 pence per Ordinary Share. The Issue Price represents:

• A 5.6% discount to the closing price of 44.5 pence per Ordinary Share on 21 May 2009

• A 75.7% discount to the 31 March 2009 net asset value per share

A Rollover of existing ZDP Shares in to New ZDP Shares and an issue of New ZDP Shares

In order to give ZDP Shareholders the opportunity to continue to invest in the Company and, for those that are subject to capital gains tax, to defer their capital gains tax liability, ZDP Shareholders are being given the opportunity to convert all or part only of their holding of ZDP Shares into a new class of zero dividend redeemable preference shares (''New ZDP Shares'') on a tax efficient basis (the ''ZDP Rollover Offer''). 

The terms of the New ZDP Shares will be substantially similar to those attaching to the existing ZDP Shares:

• a Redemption Yield of 8.0 per cent. per annum 

• 7 year term to June 2016

• 3.0 times cover at the date of admission

New ZDP Shares will also be available for subscription by new and existing investors under the New ZDP Offer for Subscription and the New ZDP Placing (together the ''New ZDP Issue''). 

BACKGROUND TO AND RATIONALE FOR THE PROPOSALS

Overview of JZCP

The Company's corporate objective is to create a portfolio of investments in businesses primarily in the United States, providing a superior overall return comprised of a current yield and significant capital appreciation.

The Company's investment strategy is to maintain and build its portfolio by investing primarily in four areas:

•    Micro-Cap Buyouts, which historically have been the main driver of JZCP's and JZEP's capital growth;

•    Mezzanine Investments comprising loans and high-yield securities, which are intended to provide current
      income with the potential for capital appreciation through equity participations;

•    Listed Bank Debt, including both senior secured debt and second lien loans, which provide income and
      can provide capital appreciation when purchased below par value; and

•    other debt and equity opportunities, including distressed debt and structured financings, derivatives and
      opportunistic purchases of publicly traded securities and investments in such opportunities indirectly
      through collective investment vehicles.

Jordan/Zalaznick Advisers, Inc. (the ''Investment Advisor'' or ''JZAI'') manages the Company's investments and advises on its investment strategies. JZAI is a leader in the US Micro-Cap Buyout market sourcing investments in Micro-Cap Buyouts through a wide network of independent business brokers that has been built up over

30 years. John (Jay) W Jordan II and David W Zalaznick, who are primarily responsible for JZAI's investment decisions, have a 30-year history of successfully executing over 100 Micro- Cap Buyouts. The Company is able to take advantage of JZAI's attractive proprietary deal flow and large network of deal-sourcing relationships.

Rationale for the Proposals

The last twelve months have seen some extraordinary and volatile conditions in the world's equity and debt markets, which have presented extraordinary opportunities for companies in the private equity industry that are in a position to take advantage of them, but at the same time extraordinary challenges. The Directors believe JZCP has navigated these challenges relatively well, with its Micro-Cap Buyout Investments having performed solidly relative to the broader market, although the deteriorating equity and credit markets have adversely affected the performance of the Company's listed investments. 

As at 30 April 2009, the Company had cash deposits of approximately US$103.7 million. The Company currently has 45,662,313 ZDP Shares in issue which have a redemption date of 24 June 2009 and a total redemption cost (including the cost of an associated forward foreign exchange contract) of US$185.9 million.

The Directors believe that opportunities will continue to arise from the current climate and believe that the Proposals will position the Company to take advantage of those opportunities whilst providing the necessary funds to satisfy the potential ZDP Share redemption cost in full, without having to sell the Company's assets at a disadvantageous point in the economic cycle.

In order to give ZDP Shareholders the opportunity to continue to invest in the Company and, for those that are subject to capital gains tax, to defer their UK capital gains tax liability, ZDP Shareholders are being given the opportunity to convert all or part only of their holding of ZDP Shares into a new class of zero dividend redeemable preference shares (''New ZDP Shares'') on a tax efficient basis (the ''ZDP Rollover Offer'') on the basis of one New ZDP Share for every one ZDP Share held on the Effective Date. 

New ZDP Shares will also be available for subscription by existing and new investors respectively under the New ZDP Issue. The New ZDP Placing is subject to clawback to satisfy valid applications for New ZDP Shares under the ZDP Rollover Offer and New ZDP Offer for Subscription.

PRINCIPAL TERMS OF THE PROPOSALS

The principal terms of the Ordinary Share Issue, the ZDP Rollover Offer and the New ZDP Issue, the creation of Limited Voting Ordinary Shares and the Share Consolidation are set out below. 

Ordinary Share Issue

Pursuant to the Ordinary Share Issue, the Company is proposing to raise up to approximately £95.6million (US$147.2.million) by offering up to 227,565,137 Ordinary Shares to Qualifying Shareholders on a pre-emptive basis, pro rata to their existing holding of Ordinary Shares.

Qualifying Shareholders are being given the opportunity to subscribe for Ordinary Shares on the basis of 7 New Ordinary Shares for every 3 existing Ordinary Shares held by them at the Record Date and so on in proportion for any other number of existing Ordinary Shares then held (the ''Open Offer'').

Certain Ordinary Shareholders that are Qualifying US Persons are being given the opportunity to subscribe for such number of Ordinary Shares as they would have been entitled to subscribe for under the Open Offer had they not been US Persons (this is being effected under the Ordinary Share Placing and is not subject to clawback under the Open Offer from Qualifying Shareholders).

Existing Ordinary Shareholders who wish to subscribe for Ordinary Shares in excess of their pro rata entitlement under the Ordinary Share Issue and new investors who wish to participate in the Ordinary Share Issue have been given the opportunity to subscribe for additional Ordinary Shares which will be subject to clawback to satisfy valid applications from Qualifying Shareholders under the Open Offer and Qualifying US persons in respect of the equivalent of their pro rata entitlements under the Ordinary Share Placing.

The Ordinary Shares will be issued at 42p per Ordinary Share (the ''Ordinary Share Issue Price''), representing a discount of 5.6 per cent. to the closing price of an existing Ordinary Share on 21 May 2009 and a discount of 75.7 per cent. to the Net Asset Value per Ordinary Share on 31 March 2009. 

Fractions of New Ordinary Shares will not be allocated to Qualifying Shareholders and entitlements to apply for New Ordinary Shares will be rounded down to the nearest whole number of New Ordinary Shares. New Ordinary Shares representing the aggregate of fractional entitlements will be taken up under the Ordinary Share Placing for the benefit of the Company. 

The Ordinary Share Issue is subject to the approval of Ordinary Shareholders and the ZDP Rollover Offer and the New ZDP Issue are subject to the approval of Ordinary Shareholders and ZDP Shareholders.

The Ordinary Share Issue is also conditional on, inter alia:

• the relevant Resolutions being passed at the EGM;

• the Ordinary Share Placing Agreement becoming unconditional and not being terminated in accordance with its terms at any time prior to Ordinary Share Admission; and

• Ordinary Share Admission having become effective on or before 8 a.m. on 19 2009 (or such later time and/or date as the Company and Jefferies may agree, being not later than 8 a.m. on 26 June 2009).

The Board has not yet decided whether to declare a final dividend for the period to 28 February 2009. Following completion of the Proposals, the Board will evaluate the Company's financial and capital resources and consider whether or not to declare a final dividend in respect of such period. The New Ordinary Shares issued under the Open Offer will be issued fully paid and will be identical to, and rank pari passu in all respects with, the existing Ordinary Shares and will rank for all dividends or other distributions declared, made or paid after the date of their issue, save for any final dividend declared in respect of the period to 28 February 2009. 

On the basis that the Ordinary Share Issue is fully subscribed, the 227,565,137 Ordinary Shares to be issued pursuant to the Ordinary Share Issue represent approximately 233 per cent. of the existing issued ordinary share capital of the Company and 70 per cent. of the Enlarged Share Capital.

ZDP Rollover Offer and New ZDP Issue

Under the ZDP Rollover Offer, existing ZDP Shareholders are being given a right to convert all or part only of their holding of ZDP Shares into New ZDP Shares. 

Subject to completion of the ZDP Rollover Offer, each existing ZDP Share validly elected to be rolled over will convert, on 22 June 2009, into one New ZDP Share to be issued on the terms set out in the New Articles.

In order to accept the ZDP Rollover Offer, ZDP Shareholders are advised to refer to the Circular. 

New ZDP Shares will also be available for subscription pursuant to the New ZDP Offer for Subscription which is being made by the Company at an issue price of 215.8p each (the ''ZDP Issue Price'') to the public in the United Kingdom. New ZDP Shares may also be placed at the ZDP Issue Price with placees procured by JPMC. The New ZDP Placing is subject to clawback to satisfy valid applications for New ZDP Shares under the ZDP Rollover Offer and New ZDP Offer for Subscription.

The terms of the New ZDP Shares will be substantially similar to those attaching to the existing ZDP Shares:

• a Redemption Yield of 8.0 per cent. per annum 

• 7 year term to June 2016

• 3.0 times cover at the date of admission

The ZDP Proposals are conditional on, inter alia:

• The relevant Resolutions being passed at the EGM;

• the New ZDP Placing Agreement becoming unconditional and not being terminated in accordance with its terms at any time prior to ZDP Admission; and

• ZDP Admission having become effective on or before 8 a.m. on 22 June 2009 (or such later time and/or date as the Company, Jefferies and JPMC may agree, being not later than 8 a.m. on 29 June 2009).

Creation of Limited Voting Ordinary Shares

The Company believes that it is currently a ''foreign private issuer'' within the meaning of Rule 405 under the US Securities Act of 1933 and Rule 3b-4 under the US Exchange Act of 1934 If, however, the Company loses its status as a ''foreign private issuer'' and is treated as a US domestic company, it is likely to be subject to extensive reporting requirements and periodic filing requirements under US securities laws, which the Company is currently not subject to and which would significantly increase the Company's regulatory and compliance costs under such US securities laws. Similarly, if the Company were to be treated as a controlled foreign corporation (''CFC'') within the meaning of the Code, certain US Holders would generally include in their gross income for US federal income tax purposes their pro rata share of the Company's ''subpart F income'' for the year even if the subpart F income is not distributed. Such US Holders may also be deemed to receive taxable distributions to the extent that the Company increases the amount of its earnings that are invested in certain types of US property. In addition, if the Company were to be treated as a CFC, a portion of any gain recognised by certain US Holders on the sale or exchange of the shares of the Company would generally be taxed as dividend income, rather than as capital gain income.

Accordingly Limited Voting Ordinary Shares are being created and made available so that certain of the Company's existing Shareholders and a new investor that are all Qualifying US Persons may participate in the Ordinary Share Issue without causing the Company to be treated as a US domestic company for the purposes of US securities laws and/or a CFC for US tax purposes.

Limited Voting Ordinary Shares and Ordinary Shares which will be identical to, and rank pari passu in all respects with, the New Ordinary Shares except that the holders of Limited Voting Ordinary Shares will only carry a limited entitlement to vote in respect of the appointment or removal of Directors and will not carry any entitlement to vote in respect of certain other matters.

Share Consolidation

In order to enhance the marketability and decrease the volatility of the market price of the Ordinary Shares, following implementation of the Ordinary Share Issue and the ZDP Proposals and subject to shareholder approval, the Ordinary Shares will be consolidated on the basis that every five Ordinary Shares will be consolidated into one Ordinary Share.

CHANGES TO THE EXISTING ADVISORY AGREEMENT

A number of amendments to the terms of the Existing Advisory Agreement are proposed, which the Directors believe are in the best interests of all Shareholders. The proposed amendments, which are conditional on approval by Ordinary Shareholders at the EGM, include:

• that the advisory agreement is terminable on 30 months' notice (currently 24 months); and notice can only be given after 30 months from the Effective Date (currently notice can be given any time after 1 July 2010). 

• that, in the event that the amended Advisory Agreement is subsequently terminated, JZAI shall receive a close-out capital gains incentive fee on all unrealised gains net of unrealised losses and carried forward losses (currently the capital gains incentive fee is only payable in respect of realised gains, net of realised losses upon termination).

In the current volatile economic and financial environment, and given the illiquid nature of the some of the Company's investment portfolio, the Directors believe it is important to have security of tenure of the investment advisor, JZAI, who has managed JZCP's assets and JZEP's assets since inception and whom the Directors believe is best placed to realise the full potential of the Company's existing assets and take advantage of the future investment opportunities available to JZCP. The Directors believe the proposed amendments will address these aims. The Directors also believe that amending the capital gains incentive fee on termination will help to ensure that assets are managed on a basis to extract maximum value for Shareholders, removing any incentive to prematurely dispose of any assets. Furthermore, David Zalaznick and John (Jay) W Jordan II, the managing principals of JZAI, have agreed to subscribe for Limited Voting Ordinary Shares instead of New Ordinary Shares in the Open Offer, as well as convert at least part of their current Ordinary Share holdings into Limited Voting Ordinary Shares, and by doing so have sacrificed a number of important voting rights, particularly regarding the control of the Company, that they would otherwise continue to have had as the Company's largest shareholders.

SUMMARY OF THE 28 FEBRUARY 2009 AUDITED RESULTS AND CURRENT TRADING

Today we announced audited financial results for the period from 14 April 2008 to 28 February 2009.

At the end of the period under review, 28 February 2009, the audited Net Asset Value was US$257.0 million, a 27.3 per cent. decline since 1 July 2008, compared to a decline in the S&P 500 Composite Total Return Index of 42.8 per cent. and a decline in the Russell 2000 Price Index of 43.4 per cent. Most of the decline was as a result of the decline in the value of JZCP's portfolio of listed equity and bank debt. The Company's private investments performed relatively well, especially given the current market turmoil.

Whilst the Company continues to leverage its deal flow network, reviewing over 250 opportunities since 1 July 2008, it remains cautious about making new ''platform'' investments but has completed a number of new investments in existing portfolio companies. The Company invested US$2.1 million in preferred stock of BG Holdings for continued expansion of its wind turbine capability and a further US$0.6 million in preferred stock to help it make a small product add-on acquisition; invested US$4.5 million in additional preferred stock of Accutest (ETL Holdings) as part of a US$9.0 million environmental laboratory acquisition; and invested an additional US$2.9 million in senior subordinated notes in Continental Cement Company to assist that company's growth plans.

As at 31 March 2009 (being the last practicable date prior to the publication of the Circular), the aggregate unaudited Net Asset Value of the Company was US$267.2 million (source: JZCP Board of Directors), representing an increase of 4.0 per cent. since the end of the financial period ending 28 February 2009. Although the underlying health of the Company's portfolio feels robust, some portfolio companies' future performance, especially those with exposure to the housing market and those to general manufacturing business, could be affected by the continuing economic downturn. Despite the current worldwide economic situation, however, the Directors believe that the Company is well positioned to benefit from the opportunities that may emerge.

EGM

The extraordinary general meeting of the Company will be held at Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3NQ, Channel Islands at 11.10 a.m. on 18 June 2009 (or as soon thereafter as the ZDP Share Class Meeting shall have concluded or been adjourned). 

OPEN OFFER INTENTIONS OF DIRECTORS

David Macfarlane, the chairman of the Company intends to apply for New Ordinary Shares pursuant to his Open Offer entitlement amounting to 140,000 New Ordinary Shares.

SHAREHOLDERS' INTENTIONS

The Company has received irrevocable undertakings representing approximately US$86.0 million and the value of these undertakings represents the minimum gross proceeds expected to be raised by the Company pursuant to the placing and open offer. Those commitments are led by our largest shareholders and the principals of our Investment Advisor, JZAI, John (Jay) W Jordan II and David Zalaznick, who have between them committed US$25.0 million.

Shareholders which in aggregate hold approximately 37 per cent. of the issued Ordinary Shares as at 19 May 2009 have irrevocably undertaken to vote in favour of the Proposals.

  ORDINARY SHARE ISSUE STATISTICS 

Issue Price per New Ordinary Share and per Limited Voting Ordinary Share	42p
Net Asset Value per Ordinary Share as at 31 March 2009	US$2.66 or 178p
Basis of Open Offer	7 New Ordinary Shares for every 3 existing Ordinary Shares
Basis of Share Consolidation	Every 5 Ordinary Shares consolidated into one Ordinary Share
Maximum number of New Ordinary Shares to be issued pursuant to the Ordinary Share Issue	227,565,137
Maximum number of Ordinary Shares in issue immediately following Ordinary Share Admission	325,093,053
Maximum number of Ordinary Shares in issue immediately following the Share Consolidation	65,018,610
Maximum estimated net proceeds of the Ordinary Share Issue, after costs	£92.3 million
Minimum estimated net proceeds of the Ordinary Share Issue, after costs	£52.6 million

NEW ZDP ISSUE STATISTICS 

Issue Price per New ZDP Share	215.80p
Illustrative initial capital entitlement per New ZDP Share	215.80p
Redemption Yield at Issue Price	8 per cent
Redemption Yield at illustrative initial capital entitlement	8 per cent.
Minimum Cover for the New ZDP Shares	3.0 times
Minimum illustrative hurdle rate to return the Final Capital Entitlement	(13.4 per cent).
Final Capital Entitlement of New ZDP Shares on 22 June 2016	369.84p
Maximum number of New ZDP Shares in issue following the New ZDP Issue	45,662,313
Maximum net proceeds of the New ZDP Issue, after costs	£97.9 million

  EXPECTED TIMETABLE OF PRINCIPAL EVENTS

ORDINARY SHARE ISSUE EXPECTED TIMETABLE

	2009
	1
Record Date for entitlement under the Open Offer	Close of business on 19 May
Posting of this Prospectus, the Circular and Application Forms	22 May
Ex-entitlement date for the Open Offer	8.00 a.m. on 26 May
Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders	8.00 a.m. on 26 May
Latest recommended time for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 9 June
Latest time for depositing Open Offer Entitlements into CREST	3.00 p.m. on 10 June
Latest time and date for splitting Application Forms (to satisfy bona fide market claims)	3.00 p.m. on 11 June
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 15 June
Latest time and date for receipt of Forms of Proxy for the Ordinary Share Class Meeting	11.00 a.m. on 16 June
Latest time and date for receipt of Forms of Proxy for the EGM	11.10 a.m. on 16 June
Announcement of results of the Ordinary Share Issue	16 June
Ordinary Share Class Meeting	11.00 a.m. on 18 June
EGM	11.00 a.m. on 18 June
Ordinary Share Admission and commencement of dealings in New Ordinary Shares	8.00 a.m. on 19 June
CREST accounts credited	19 June
Share Consolidation Record Date	6.00 p.m. on 22 June
Effective date of Share Consolidation	8.00 a.m. on 23 June
Despatch of definitive Ordinary Shares certificates (to reflect the Share Consolidation), New Ordinary Share certificates (where applicable) and Limited Voting Ordinary Share certificates	by 30 June

All times are London times. Each of the times and dates above is subject to change.

NEW ZDP ISSUE EXPECTED TIMETABLE

	2009
Commencement of the New ZDP Offer for Subscription	22 May
Latest time and date for receipt of Forms of Election and Application Forms under the ZDP Rollover Offer and New ZDP Offer for Subscription	11.00 a.m. on 15 June
Latest time and date for receipt of Forms of Proxy for the ZDP Class Meeting	11.05 a.m. on 16 June
Latest time and date for receipt of Forms of Proxy for the EGM	11.10 a.m. on 16 June
Announcement of results of the New ZDP Placing and Offers	16 June
ZDP Class Meeting	11.05 a.m. on 18 June
EGM	11.10 a.m. on 18 June
Record Date for ZDP Rollover Offer	19 June
Conversion of ZDP Shares, in respect of which elections made and not revoked, into New ZDP Shares, ZDP Admission and commencement of dealings in New ZDP Shares	8. 00 a.m. on 22 June
ZDP Admission and commencement of dealings in New ZDP Shares	8.00 a.m. on 22 June
CREST accounts credited	22 June
Despatch of definitive New ZDP Share certificates (where applicable)	by 30 June

All times are London times. Each of the times and dates above is subject to change.

  IMPORTANT NOTICE

A copy of each of the Prospectuses will be available, following publication, from the registered office of the Company at 2nd Floor, Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3NQ, Channel Islands. The Prospectuses will also be available for inspection during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays are excepted) from the date of their publication until ZDP Admission at the offices of Ashurst, Broadwalk House, 5 Appold Street, London EC2A 2HA. 

This announcement shall not constitute or form part of an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell or issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 

This announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Jefferies or by any of its respective affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefore whether arising in tort, contract or otherwise is expressly disclaimed. 

The distribution or transmission of this announcement and offering of New Ordinary Shares or Limited Voting Ordinary Shares pursuant to the Ordinary Share Issue and/or New ZDP Shares pursuant to the ZDP Proposals to persons located or resident in, or who are citizens of, or who have a registered address other than, the United Kingdom may be affected by the laws of the relevant jurisdictions. It is the responsibility of any such person (including, without limitation, custodians, nominees and trustees) wishing to apply for New Ordinary Shares or Limited Voting Ordinary Shares under the Ordinary Share Issue and/or New ZDP Shares pursuant to the ZDP Proposals to satisfy himself or herself as to the full observance of the laws of any relevant territory in connection therewith, including obtaining any governmental or other consents that may be required, observing any other formalities required to be observed in such territory and paying any issue, transfer or other taxes due in such territory. Any failure to comply with such laws may constitute a violation of the securities laws of any such jurisdiction. 

The Ordinary Share Issue and the ZDP Proposals will not be made, directly or indirectly, in the United States, Australia, Canada, the Republic of South Africa or Japan (the 'Restricted Jurisdictions') unless by means of lawful prior registration or qualification under the applicable laws of the Restricted Jurisdiction, or under an exemption from such requirements. Accordingly, copies of this announcement, including the appendix, are not being, and must not be, mailed or otherwise distributed or sent in, into or from any Restricted Jurisdiction into which the same would be unlawful. Persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute, mail or otherwise, forward or send it in, into or from any Restricted Jurisdiction, and so doing may render any purported acceptance or application relating to the Ordinary Share Issue or the ZDP Proposals invalid. 

These materials are not for distribution, directly or indirectly, in or into the United States (including its territories and dependencies, any State of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The New Ordinary Shares, Limited Voting Ordinary Shares and the New ZDP Shares have not been, and will not be, registered under the Securities Act of 1933 (the 'Securities Act') or under the securities laws of any state of the United States.

The New Ordinary Shares, Limited Voting Ordinary Shares and the New ZDP Shares may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offer of the New Ordinary Shares, Limited Voting Ordinary Shares and the New ZDP Shares in the United States.

The New Ordinary Shares and the New ZDP Shares to be issued pursuant to the Proposals have not been, and will not be, admitted to trading on any stock exchange other than the London Stock Exchange. The Limited Voting Ordinary Shares have not been, and will not be, admitted to trading on any stock exchange at all.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement. 

Forward Looking Statements

This announcement contains certain forward-looking statements which may include reference to one or more of the following: the Company's financial condition, results of operations, cash flows, dividends, financing plans, business strategies, operating efficiencies or synergies, budgets, expenditures, competitive positions, growth opportunities, plans and objectives of management and other matters. Statements in this announcement that are not historical facts are hereby identified as 'forward-looking statements'. Such forward-looking statements, including, without limitation, those relating to future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to the Company, wherever they occur in this announcement, are necessarily based on assumptions reflecting the views of the Company and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include without limitation: economic and business cycles, the terms and conditions of the Company's financing arrangements, foreign currency rate fluctuations, competition in the Company's investment universe and trends in the Company's field of operations. 

These forward-looking statements speak only as at the date of this announcement. Except as required by the FSA, the London Stock Exchange, the rules made by the FSA under Part VI of FSMA or applicable law, the Company does not have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise.

Except as required by the FSA, the London Stock Exchange, the rules made by the FSA under Part VI of FSMA or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur. 

This announcement is not a prospectus. A prospectus relating to the Ordinary Share Issue and a prospectus relating to the ZDP Proposals are expected to be published today. Investors should only rely on the information contained in the Prospectuses and any documents incorporated therein by reference. 

  APPENDIX - DEFINITIONS

Company or JZCP	JZ Capital Partners Limited of 2nd Floor, Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3NQ
Circular	the Circular of the Company dated 22 May 2009
EGM	the extraordinary general meeting of the Company to be held on 18 June 2009, notice of which is set out in the Circular
Existing Advisory Agreement	the advisory and management agreement currently in force between the Company and the Investment Advisor dated 12 May 2008
FSMA	the Financial Services and Markets Act 2000 of England and Wales, as amended
Investment Adviser or JZAI	Jordan/Zalaznick Advisers, Inc, a company beneficially owned by John (Jay) W Jordan II and David W Zalaznick, being the Company's investment advisor and manager
Jefferies	Jefferies International Limited, a company incorporated in England and Wales under registered number 1978621 whose registered office is at Vintners Place, 68 Upper Thames Street, London EC4V 3BJ
JZEP	JZ Equity Partners Plc, the Company's UK incorporated predecessor
Limited Voting Ordinary Shares	the limited voting ordinary shares of no par value in the capital of the Company to be issued pursuant to the Ordinary Share Issue or into which existing Ordinary Shares may convert as described in the Circular
New Ordinary Shares	the Ordinary Shares (excluding the Limited Voting Ordinary Shares) to be issued pursuant to the Ordinary Share Issue
New ZDP Issue	the New ZDP Placing and the New ZDP Offer for Subscription
New ZDP Offer for Subscription	the offer for subscription of New ZDP Shares to the public on the terms set out in the ZDP Prospectus
New ZDP Placing	the proposed placing of New ZDP Shares by JPMC on behalf of the Company as further described in the ZDP Prospectus
New ZDP Shares	the new zero dividend redeemable preference shares of no par value in the capital of the Company to be issued subject to the ZDP Proposals becoming effective
Open Offer	the pre-emptive offering of New Ordinary Shares to existing Ordinary Shareholders, pro rata to their existing holdings, as set out in the Ordinary Share Prospectus
Ordinary Share Admission	admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange's market for listed securities becoming effective
Ordinary Share Issue	the Open Offer and the Ordinary Share Placing
Ordinary Share Issue Price	42p per Ordinary Share to be issued pursuant to the Ordinary Share Issue
Ordinary Share Placing	the proposed placing of Ordinary Shares to certain existing Ordinary Shareholders and a new investor pursuant to the terms of the Ordinary Share Placing Agreement as described in the Ordinary Share Prospectus
Ordinary Share Prospectus	the prospectus published by the Company on the date hereof in connection with the Ordinary Share Issue
Ordinary Shares	the ordinary shares of no par value in the capital of the Company, including the New Ordinary Shares and the Limited Voting Ordinary Shares
Prospectus	the Ordinary Share Prospectus and ZDP Prospectus
Proposals	the ZDP Proposals, the Ordinary Share Issue, the proposed amendments to the Advisory Agreement, the Ordinary Share Consolidation, the Related Party Transactions and the adoption of new articles of association
Qualifying Shareholders	holders of Ordinary Shares on the Company's register of members at the Record Date (other than overseas shareholders)
Qualifying US Persons	US Persons that are eligible to subscribe for shares under US law and the Company's articles of association
Record Date	19 May 2009
Redemption Yield	in respect of a New ZDP Share, the annually compounded rate of interest at which the total discounted values of future payments of income and capital equate to its actual or assumed value at the date of calculation
Related Party Transactions	the related party transactions described in the Circular
ZDP Issue Price	215.80p per New ZDP Share
ZDP Proposals	the proposals for the creation of the New ZDP Shares, the New ZDP Issue and, subject to valid elections, the ZDP Rollover Offer
ZDP Prospectus	the prospectus published by the Company on the date hereof in connection with the ZDP Proposals
ZDP Rollover Offer	the attaching to each ZDP Share of a right to convert into one New ZDP Share, as described in the ZDP Prospectus
ZDP Share Class Meeting	the class meeting of ZDP Shareholders to be held on 18 June 2009, notice of which is set out in the Circular
ZDP Shares	the existing zero dividend redeemable preference shares of no par value in the capital of the Company

 

END

 

 

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