SVG Capital PLC - Bond launch & sale of assets
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RNS Number:9483T SVG Capital PLC 08 May 2008 For immediate release 7.00am 8 May 2008 SVG Capital strengthens balance sheet ahead of new investment opportunities Launch of Convertible Bond and Sale of Assets The Board of SVG Capital today announces the launch of a convertible bond offering of £100 million1 and the signing of agreements for the sale of a portfolio of private equity fund interests representing 6.9% of net assets2 at 31 December 2007. The proceeds of these transactions, together with the recently announced realisations of debitel and Parkway, both of which were sold at a premium to net asset value, will strengthen SVG Capital's balance sheet and liquidity position and give the Company greater flexibility to take advantage of opportunities arising from the launch of new private equity funds, including investment vehicles launched by SVG Advisers, and for general corporate purposes. Convertible bond offering SVG Capital is launching an offering of £100 million in principal amount of convertible bonds (the "Bonds") targeting institutional investors outside of the US. The Bonds will be subordinated to the Company's Senior Notes and bank lines, convertible into the Ordinary Shares of the Company and will have a maturity of 2016. The conversion price will be 1000p, which represents a premium to the 31 December 2007 net asset value of 974.3p3. The Company has appointed JPMorgan Cazenove as bookrunner of the Bond issue with Key Capital and The Royal Bank of Scotland acting as co-lead managers. Closing of the issue will be subject to satisfaction of customary conditions contained in the Underwriting Agreement expected to be entered into today following determination of the final terms of the offering. Key Capital acted as Financial Adviser to SVG Capital in relation to the Bond issue. Sale of secondary portfolio of fund interests The portfolio of private equity fund interests comprises a range of interests that includes mature and non-core assets. The agreed purchase price for the portfolio is £102.4 million4 which compares to a 31 December 2007 net asset value of the fund interests of £100.3 million5. In the local currency of the underlying fund interests the purchase price paid, after adjusting for material realisations and movements in the value of the quoted portfolio, was approximately in-line with 31 December 2007 valuations. The purchase price will be updated at closing to reflect any cash flows associated with the assets. Following the sale of these fund interests, SVG Capital's core investments and commitments remain focused on Permira funds, which continue to represent 89% of SVG Capital's private equity portfolio. The portfolio of fund interests agreed to be sold are summarised below: Fund Vintage Year % of holding sold SV Life Sciences Fund II 1999 100.0% SV Investments Fund I 1999 25.0% Permira Europe II 2000 *21.4% SV Life Sciences Fund III 2002 80.0% Permira Europe III 2003 *10.4% Permira IV 2006 *1.7% * total holdings include holdings through feeder vehicles advised by SVG Advisers Two separate sale agreements have been entered into. The purchasers of the fund interests are Lexington Partners, the world's largest independent buyer of secondary interests in private equity funds, which has conditionally agreed to acquire 80% of the fund interests being sold for £81.6 million, and SVG Diamond Private Equity Holdings III Limited, which has conditionally agreed to acquire 20% of the fund interests being sold for £20.8 million, in each case subject to adjustments as described above. Completion of these transactions is conditional upon certain consents being obtained from the general partners of the funds in question and is expected to occur in the fourth quarter of 2008. Nicholas Ferguson, Chairman of SVG Capital commented: "We believe that the current market environment will produce a number of interesting investment opportunities which will have the potential to provide superior returns for SVG Capital and its shareholders over time, and have taken the opportunity to further strengthen our balance sheet ahead of this." This announcement does not constitute or form part of an offer to sell or the solicitation of an offer to subscribe for or otherwise acquire any securities. The securities have not been and will not be registered under the U.S. Securities Act of 1933 and are subject to U.S. tax law requirements. Accordingly, these securities may not be offered, sold or delivered in the United States or to U.S. persons. Stabilisation/FSA For further information, please contact: SVG Capital plc 020 7010 8900 Nicholas Ferguson/Andrew Williams/Alice Kain Penrose Financial 020 7786 4888 Andrew Nicolls/Alex Clelland/Francesca Reville 1 Subject to upsize (maximum underlying shares = 10% of the outstanding shares) 2 Including the Directors' 31 December 2007 unaudited valuation of SVG Advisers and adjusting for cash flow since then 3 Including the Directors' 31 December 2007 unaudited valuation of SVG Advisers 4 Prior to adjusting for any cash flows associated with the assets since 31 December 2007 5 This differs from the 31 December 2007 General Partners' reported value, which may discount quoted stocks as the General Partners do not report under IFRS This press release is for information only and does not constitute an offer to sell, subscribe, purchase, exchange or transfer any securities or a solicitation of any such offer. This communication is directed only at persons who (i) are outside the United Kingdom or (ii) have professional experience in matters relating to investments or (iii) are persons falling within Article 49 (2((a) to (d) ("high net worth companies, unincorporated associations etc") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. This information is provided by RNS The company news service from the London Stock Exchange END MSCSSLSMASASEDI