ACP announces €125m Leverage Facility from RBS

5 July 2006

ACP Capital has today raised a committed leverage facility of Euro125m to assist in the expansion of its mezzanine business.

ACP Capital Limited (AIM: APL) a Jersey based niche investment and fund manager, announces today that it has raised, an initial committed leverage facility with the Royal Bank of Scotland ("RBS") of Euro125m to finance the acquisition of rated mezzanine assets. This facility will enable the generation of enhanced returns by financing up to approximately 65% of rated mezzanine assets, with the remaining portion funded by equity.

The Company is also in the process of raising further equity to fund the expansion of the mezzanine business through the intended float of ACP Mezzanine Limited, a vehicle to be managed by the Company on the AIM exchange, with a target equity raising of Euro150m.

ACP Capital has also recently announced the appointment of Jeffrey Bennett as its Chief Investment Officer for ACP Mezzanine. ACP Mezzanine will focus primarily in the small cap business sectors throughout Continental Europe.

Commenting on the announcement, Derek Vago, CEO of ACP Capital said: "Putting in place the leverage facility with RBS, coupled with the appointment of Jeff Bennett as CIO, is intended to propel ACP Mezzanine into becoming a successful niche mezzanine lender with the resources required to achieve the volume and return targets which ACP Capital has projected."

Commenting on the leverage facility, an RBS spokesman said "We are delighted to be involved in this innovative transaction."

Enquiries:
Redleaf Communications:
Rob Bain 020 7955 1410

ACP Mezzanine ("ACPM")

ACPM intends to pursue a primary strategy as a mezzanine lender, originating, structuring and underwriting the majority of its mezzanine investments. ACPM's investment strategy will be implemented and managed by ACP Capital Limited.

ACPM's strategy is different from that followed by a number of participants in the Mezzanine financing market, which focus on acquiring assets directly from third parties though a syndication process.

ACPM intends to invest in assets located primarily across Europe originated through a direct integrated finance approach alongside ACP Capital's Strategic Platforms and Vehicles, and, to a lesser extent, to purchase assets in the secondary market if expected risk adjusted returns are attractive. It is expected that the integrated finance approach will account for at least two thirds of ACPM's mezzanine assets.

ACPM intends to pursue an integrated finance approach in partnership with ACP Capital with the objective of delivering a complete financing solution for prospective borrowers. Pursuant to this strategy, ACP Capital Limited would provide senior debt and, in some cases, equity funding, while ACPM would provide the mezzanine financing. ACPM intends to pursue this strategy with ACP Capital Limited in niche markets where ACP Capital considers there to be an integrated finance opportunity, such as the German " Mittelstand" (small and middle-sized privately-owned companies).

ACP Capital Ltd ("ACP")

ACP Capital is a Jersey based company, which listed on AIM in January 2006 and has a current market capitalization of approximately #70m. ACP is focused on providing an integrated finance approach (through the use of equity, mezzanine and/or senior debt) to businesses with strong asset backing and with recognized leadership positions in the sectors in which they operate. ACP is primarily seeking opportunities in Continental Europe, where opportunities for consolidation and growth are considerable.

ACP also intends to launch a series of alternative investment vehicles in primarily niche sectors focused on both asset-backed and non asset-backed investments by being a provider of funding across the entire capital structure.

It will also act as fund manager for these vehicles, effectively establishing itself as an alternative investment and fund manager. The first such fund is ACP Mezzanine Limited. ACP intends to subscribing for not less than Euro22 million of the equity in ACP Mezzanine at its launch. It is ACP's stated aim to launch one new managed fund targeting a niche product sector each year.

Such vehicles will enable ACP to be a strategic investor and/or partner with companies who operate in sectors where ACP can provide both strategic advice and the funding described above.

ACP Capital has a highly experienced international management team:

  • Derek Vago, CEO, was previously managing director and co-head of the Asset Finance Group ("AFG") at Nomura International plc where he was responsible for all balance sheet activities including equity, mezzanine, and senior debt financing across both asset backed and non asset-backed sectors. Among transactions he led for AFG were the acquisition of seven Center Parcs European assets and the acquisition of Earls Court and Olympia.

  • Eric Youngblood, CFO, has 18 years experience in Global Structured Finance, primarily in Securitisation. He was most recently at Nomura International plc where he was the Head of Asset-Backed Securitisation for AFG. Eric led the negotiation of the RBS facility for ACP.

  • Jeff Bennett, CIO, has over 18 years of non-investment grade financing experience, most recently at Morgan Stanley where he was a Managing Director in the Leveraged Finance Group. During his time at Morgan Stanley, Jeff structured some of the largest European financings including: the Euro10bn financing package for Ineos Group Holdings' acquisition of Innovene, the #1.4bn financing to support the public to private leveraged buyout of Debenhams, and a Euro 30bn senior bank facility for France Telecom.

  • Nikolaj Larsen, Managing Director, Head of Strategic Investments has 6 years experience in Investment Banking. Prior positions include Head of Core Underwriting in the AFG team at Nomura International plc where he focused on asset backed deals such as the Earls Court and Olympia acquisition and non-asset backed deals such as the acquisition and financing of Nordsee GmbH for the German food retailer Kamps Food Retail Investment SA ("KFRI").

Non executive directors include Heiner Kamps, founder of Kamps AG and a leading retail operator in Germany, and Francois Georges, former CEO of Pierres & Vacances. Mr. Kamps and Mr. Georges provide direct access to opportunities arising in Germany and France. In addition, Alan Braxton is a non executive director. Mr. Braxton is currently managing director of Presidio Partners, a leading international private placement advisor whose experience and expertise will help with establishment of the various listed investment funds.