Reconstruction Capital II returned €17.4m to its shareholders- In its annual report for the year ending 31 December 2017, Reconstruction Capital II (RC2) reported that its NAV decreased by 31.8% from €0.3670 per share to €0.2504 per share. This was because it returned €17.4m to Shareholders over the year. The majority of this was the proceeds of the sale of Albalact S.A. for €19.6m during 2016. (click here for that story).
Activity
The company reported that in March 2017, its stake in Top Factoring SRL was sold, together with a related portfolio of non-performing loans held by it’s wholly owned subsidiary, Glasro Holdings Ltd (together, the “Top Factoring Group”). The sale was completed in April. The total net amount received was €12.8m.
Glasro Holdings Limited gave €7.5m of the sale to the RC2 in the form of dividends. Glasro used €2.85m from the sale to invest in Telecredit IFN S.A., a Romanian non-banking financial institution that provides consumer loans to individuals. Glasro now owns 80% of Telecredit. RC2’s former partner in Top Factoring SRL and family own the remaining 20%.
The company has what it calls a “trading programme portfolio” of residual Romanian listed equities worth €0.09m compared to €0.15m at the end of the prior year. It continued to sell this down and €0.08m was raised during the year.
Return of €17.4m to shareholders
- During 2017, Reconstruction Capital II issued 16,997,375 B shares at value of €1 per share as a bonus to existing ordinary shareholders, redeemable at the option of RC2
- Subsequently, the company redeemed all of those shares
- The company also bought back 2.6m of its own shares for cancellation in 2017, at a further cost of €0.4m
Investing objective and policy
In January 2018 and subsequent to the report period end, QuotedData reported that the company had revised its investing objective and policy to focus on property in Romania (click here for that report ).
“At a general shareholder meeting on 21 February 2018, the investment objective of RC2 was changed so that it now aims to achieve capital appreciation and/or to generate investment income returns through the acquisition of real estate assets in Romania, including the development of such assets, and/or the acquisition of significant or controlling stakes in companies established in, or operating predominantly in Romania, primarily in the real estate sector. Any new private equity investments in companies operating in sectors other than real estate would be limited to 25% of RC2’s total assets at the time of effecting the investment. However, RC2 may continue to make follow-on investments in existing portfolio companies without any such limitation.
The same shareholder meeting decided that the next continuation vote will be held in 2023 and that RC2 can acquire 22% of the issued share capital of Reconstruction Capital Plc for €1.6m and 10% of the issued share capital of the Romanian Investment Fund Limited for €1.7m, two Romanian-focused investment funds whose main underlying asset is a 60% shareholding in Policolor S.A. in which RC2 already owns the balance of 40%. The main objective of the acquisition, which will give RC2 a further 15.36% indirect shareholding in Policolor S.A., is to provide RC2 with greater control over the exit process from this asset. Only a part of the above-mentioned acquisition has been settled to date, amounting to EUR1.2m, with the rest being delayed by technical settlement issues which are in the course of being resolved with the vendors.”
RC2 : Reconstruction Capital II returned €17.4m to its shareholders