JZ Capital Partners Ltd - Redemption of Subordinated Loan Notes

JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP")
(a closed-ended investment company incorporated with limited liability under the laws of Guernsey with registered number 48761)
LEI 549300TZCK08Q16HHU44

Redemption of Subordinated Loan Notes

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014, WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

15 February 2023

JZ Capital Partners Limited, the London listed fund that has investments in US and European microcap companies and US real estate, is pleased to announce that, following a number of recent realisations (including most recently the closing of the Deflecto Holdings' portfolio company disposal as announced by the Company on 24 January 2023) and consistent with the Company's investment policy of repaying its debt obligations, the Company has undertaken an early voluntary redemption in full of its subordinated 6 per cent. loan notes issued to David W. Zalaznick and John (Jay) Jordan II and their affiliates (the "Noteholders") which were due to mature on 30 September 2023 (the "Subordinated Loan Notes"). In connection with the voluntary redemption, the Company has funded the payment to the Noteholders of approximately US$32 million in respect of the principal and interest outstanding under the Subordinated Loan Notes.

As previously announced, voluntary redemptions of the Subordinated Loan Notes are permitted, provided certain financial tests as set out within the senior facility agreement provided by WhiteHorse Capital Management, LLC (the "Senior Facility") are satisfied. These include (a) there being no event of default in existence under the Senior Facility, (b) the Company maintaining a minimum asset coverage ratio (calculated by reference to eligible assets, subject to customary ineligibility criteria and concentration limits, plus unrestricted cash) of not less than 4.00 to 1.00, and (c) ensuring the Company retains an aggregate amount of unrestricted cash and cash equivalents of not less than US$12.5 million.

Following the voluntary redemption of the Subordinated Loan Notes, the Company has approximately US$105 million of cash and cash equivalents. The Company needs to continue to maintain such cash liquidity to invest in accordance with its existing investment policy to maximise the value of its existing portfolio investments where appropriate, as well as in the current uncertain economic climate to support them and so as to meet existing obligations as they fall due.

The Company remains focused upon its existing investment policy as approved by shareholders, which includes not making further investments outside of existing obligations or to support existing portfolio companies, and with the intention of realising the maximum value of the Company's investments and, after repayment of all its indebtedness, to return capital to shareholders.

Market Abuse Regulation

The information contained within this announcement is considered by the Company to constitute inside information as stipulated under MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

The person responsible for arranging the release of this announcement on behalf of the Company is David Macfarlane, Chairman of JZCP.

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Important Notice

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements relate to matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, policies and the development of its strategies may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the investment performance, result of operations, financial condition, liquidity and policies of the Company and development of its strategies, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. These forward-looking statements speak only as at the date of this announcement. Subject to their legal and regulatory obligations, each of the Company, Jordan/Zalaznick Advisers, Inc. and their respective affiliates expressly disclaims any obligations to update, review or revise any forward-looking statement contained herein whether to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based or as a result of new information, future developments or otherwise.