Monthly NAV, Dividend and Investment Update

RNS Number : 1781L

SQN Asset Finance Income Fund Ltd

21 December 2018

 

 21 December 2018

SQN Asset Finance Income Fund Limited

Monthly Net Asset Value, Dividend and Investment Update

Net Asset Value and Performance

SQN Asset Finance Income Fund Limited (the "Company"), the leading diversified equipment leasing fund listed in the UK, is pleased to provide its monthly net asset value ("NAV") update.

As at 30 November 2018, the unaudited estimated NAV per Ordinary Share¹ was 97.49 pence.

As at 30 November 2018, the unaudited estimated NAV per C Share¹ was 98.12 pence.

The Company also announces the cumulative NAV total return² performance as at 30 November 2018, as follows:

Share class	Month-to-month return	1 year return	3 year return	Return since inception
Ordinary shares	0.52%	5.69%	21.30%	31.10%
C shares	0.55%	3.95%	-	4.58%

Dividends

The Company is pleased to announce a dividend of 0.6042 pence per Ordinary Share and per C Share for the month ended 30 November 2018, reflecting an annualised dividend of 7.25 pence for each share class. The dividend will be payable on 21 January 2019 to holders of each share class on the register on 11 January 2019. The ex-dividend date is 10 January 2019.

¹NAV Footnote

The Ordinary Share and C Share NAVs are quoted before deducting the 0.6042 pence per share dividends, announced on 21 November 2018 that went ex-dividend on 6 December 2018 and were paid on 17 December 2018.

²Performance Footnote

The NAV total return details the change in NAV from the start of the relevant period and assumes that dividends paid to shareholders are reinvested at NAV.

Investment Updates

Suniva:

Following the update on the Suniva investment provided in the Annual Report released on 3 October 2018, in which the Company reported that it had come into an adversarial position with its co-debtor-in-possession lender ("co-DIP Lender"), the Company is pleased to announce that a resolution has been reached and that all adversarial proceedings have been dismissed.

Further, the Company has reported over the past year that it has been seeking a buyer or joint venture partner to revitalise the operations of Suniva in order to facilitate a recovery of the Company's investment. The Company today announces that it has executed a term sheet with such a partner which includes an instalment sale of the equipment, subject to certain performance milestones.

As part of the settlement with the co-DIP Lender, the Company has agreed to sell its position in the DIP Loan for $2.5 million and enter into a lease for certain intellectual property and other assets that served as collateral for the Company's loans. Once the terms of the lease have been agreed,  the Company will receive  additional consideration of $800,000, to be paid in quarterly instalments over the next two years.

In addition, the Company also announces today that it has entered into a collaborative agreement with the co-DIP lender, all of the parties to the estate of Suniva, and new investors unrelated to the entity with which the Company has executed the term sheet.  As part of this agreement, a combination of the co-DIP Lender and new investors plan to invest between $15 million and $20 million in pursuit of a potential distribution of tariffs collected for the benefit of the U.S. domestic solar manufacturing industry, the proceeds of which could further contribute to the full recovery.

None of the agreements made affect in any way the Company's ability to collect on the guarantee. Therefore, at the same time, the Company continues to pursue payment from the publicly-traded guarantor, which has specifically reserved for the liability in its latest published financial statements.   

The Investment Manager remains confident that this combination of developments will lead to a full recovery of the Company's investment although there remains uncertainty over the timing of such recovery. In light of this, the Board is reviewing the impact of the expected timing of receipts on the carrying value of the asset. 

Marine Vessels:

The Company reports today that it has received €19 million in cash plus a note for additional interest from the sale of four vessels which served as collateral for a loan that had previously been reported as delinquent. The outstanding principal balance on the investment was approximately €15 million with the balance plus the note accounting for additional charges and interest. At the settlement of this transaction the Company will have generated an approximate 10% internal rate of return.

Factsheet

The Company's factsheet for November 2018 will shortly be available on the Company's website: www.sqncapital.com/managed-funds/sqn-asset-finance-income-fund. 

For further information please contact:

SQN Capital Management, LLC Jeremiah Silkowski Neil Robert	01932 575 888
Winterflood Securities Limited	020 3100 0000
Neil Langford Chris Mills
Buchanan Charles Ryland Henry Wilson	020 7466 5000

Notes to Editor

The Company invests in equipment lease and asset finance arrangements across a diverse portfolio of assets and industries predominantly in the UK, Northern Europe and US. The Company focuses on business-essential, revenue-producing (or cost saving) equipment and other assets with high in-place value and long economic life relative to the investment term.

The Company's Investment Managers are SQN Capital Management, LLC, a Registered Investment Advisor with the United States Securities and Exchange Commission and its subsidiary, SQN Capital Management (UK) Limited. The principals responsible for managing the portfolio are Neil Roberts and Jeremiah Silkowski.

 

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