Trading Update and Termination of Investment Management Agreement

25 January 2010

ACP Mezzanine Limited (the "Company" or “ACPM”: AIM: ACPM) today announces its unaudited, indicative NAV per share as at 31 December 2009 of 9.5 eurocents (30 September 2009: 30.2 eurocents).

As a result of the disposal of a majority of the portfolio in the period and the cancellation of the Leasecom facility, the Company has made two capital distributions since 30 September 2009 totalling €62.6 million, equivalent to 26.55 eurocents per ACPM share.

The indicative value of the portfolio, together with cash balances, as at 31 December 2009 was as follows:

Portfolio 31 December 2009 30 September 2009
  Euro’000 Euro’000
IFR syndicated loans 15,691 25,588
IFR pref equity - 14,942
IFR pref equity - accrued interest - 6,195
Other loans - 34
CLOs - 4,367
CDOs and RMBS - 383
Total portfolio assets 15,691 51,509
Cash balance 5,717 19,567

Note: Indicative prices do not necessarily reflect the realisable value of such investments.

The reduction in the portfolio valuation reflects the disposal in the period of 70% of the ACPM portfolio held at 30 September 2009.

ACPM’s portfolio now comprises only its investment in IFR Capital’s A, B and C debt tranches, which showed a favourable valuation movement of €0.4 million (0.84%) over the period.

The significant events since the 30 September 2009 trading update are summarised below:

  • On 6 November 2009, the Company concluded an agreement to cancel its €15 million commitment to Leasecom Financial Assets SAS, a subsidiary of Leasecom Group SAS.
  • On 12 November 2009, the Company sold two of its CLO investments (Dalradian European and Cadogan Square) for €2.2 million in cash. The carrying value of these investments at 30 September 2009 was €1.3 million.
  • On 25 November 2009, a return of capital of 7.05 eurocents per share was made to shareholders;
  • On 25 November 2009, the Company sold all of its preference shares in IFR Jersey Limited, a wholly owned subsidiary of IFR Capital plc ("IFR"), for €28.6 million in cash. Their book value and accrued dividends as at 30 September 2009 amounted to €21.1 million;
  • On 25 November 2009, ACPM settled all outstanding litigation with IFR without any admission of liability and with each party bearing their own costs;
  • On 4 December 2009, the Company sold its D tranche position in IFR's debt, together with all accrued interest from 1 October 2009 until the date of transfer, (the "D Tranche") for €15.0 million in cash. The book value of the D Tranche at 30 September 2009 was €10.1 million;
  • On 14 December 2009, the Company sold its remaining portfolio of CDOs, CLOs, and RMBS for €4.5 million in cash. The carrying value of these assets at 30 September 2009 was €3.55 million.
  • On 22 December 2009, a return of capital of 19.50 eurocents per share was made to shareholders;

The Company has no borrowings.

Notice of termination of the Investment Management Agreement

The Company has given the requisite minimum notice period to ACP Investment Management Limited (the “Investment Manager”) to terminate the Investment Management Agreement dated 20 July 2006 between the parties (the "IMA"). The IMA will therefore terminate on 3 December 2011 (the "Termination Date").

The decision to give such notice reflects the reduction in the portfolio held by the Company.

Under the terms of the IMA, the Company may terminate the IMA prior to the Termination Date by payment of a termination fee to the Investment Manager equal to twice the four most recent quarterly performance related and management fees paid to the Investment Manager by the Company.

Enquiries

  • Hugh Field/Bruce Garrow, Collins Stewart Europe, +44 (0) 207 523 8350 (Nominated Adviser)
  • Tim McCall/ Barnaby Fry, Hogarth Partnership, +44 (0) 207 357 9477