Candover’s net asset value fell by 39.1% over H1 2016 to 148p.
In late April, Candover announced the partial realisation by Arle of its investments in Parques Reunidos and Technogym S.p.A, following the initial public offering of Parques in Spain and Technogym in Italy. In the IPO of Parques, Candover sold 7.7% of its interest in Parques for net cash proceeds of EUR3.5 million with the remaining interest in Parques valued at EUR42.1 million at the IPO price. Dealings in the shares of Parques commenced on 29th April 2016, following which the share price declined by 15.8% up to 30th June. The retained interest in Parques represents approximately 3.3% of its share capital.
In the IPO of Technogym, Candover sold 71.9% of its interest in Technogym for net cash proceeds of EUR17.3 million, after the exercise of the greenshoe option. Candover’s remaining interest in Technogym was valued at EUR7.3 million at the IPO price. Dealings in the shares of Technogym commenced on 3rd May 2016, following which the share price increased by 21.7% up to 30th June. The retained interest in Technogym represents approximately 0.89% of its share capital.
Following the respective IPOs, both shareholdings are subject to lock ups of 180 days from the date that shares commenced trading.
The retained portfolio’s aggregate value decreased by GBP15.4 million, on a constant currency basis, which reflects a write down in the value of Parques of GBP16.5 million offset by a GBP1.1 million increase in the valuation of Technogym. The impact of foreign currency movements increased the valuation of the portfolio by GBP5.7 million, reflecting the weakness of Sterling relative to the Euro.
Candover’s net debt decreased to GBP10.2 million during the first six months, compared to GBP33.2 million at the year end. This comprised gross cash balances of GBP20.6 million and gross debt of GBP30.8 million. The decrease in net debt reflected the receipt of aggregate realisation proceeds of GBP30.1 million from the Parques and Technogym IPOs together with proceeds from completion of the sale of the balance of Stork BV. This was offset by accrued interest charges, operating expenses and adverse foreign currency movements totalling GBP7.1 million.
In May 2016, the Company announced that the Board had concluded that, given both the length of the lock up period and the structure of Candover’s debt arrangements, the best use of cash balances was to make an initial repayment of
debt rather than make a distribution to shareholders as permitted by the debt facility. This decision reflected the fact that under the terms of the debt facility a prepayment of up to EUR19.4 million is allowed, subject to the lender receiving a minimum return of 1.15x on the principal repaid. If this payment had been delayed until after 12th August 2016, the minimum return would have increased to 1.4x principal, diluting net assets by GBP3.85 million. The
repayment was completed in late June.
CDI : Parques Reunidos responsible for big drop in Candover NAV