Chenavari Capital Solutions hit by discount widening – Chenavari Capital Solutions Limited has published its annual report covering the year to the end of September 2018. The highlights are:
- A net asset value total return of 1.94% (dividends reinvested) (2017: 5.71%).
- The NAV declined from 92.91 pence at 30 September 2017 to 89.37 pence at 30 September 2018 net of distributions.
- Dividends of 4.00 pence per share were declared in respect of the year (2017: 6.75 pence)
- The mid-market share price at 30 September 2018 was 78.5 pence (2017: 90.5 pence), representing a discount to NAV of 12.2% (2017: discount of 2.59%).
From 1 January 2017, the company entered into a realisation period and started to return any spare cash to shareholders. During the year, three returns of capital were made: in December 2017, May 2018 and September 2018, in the form of compulsory redemptions of shares. These were the equivalent of a total distribution of 37.61% of the share capital as at IPO. It is expected that the portfolio will be substantially realised and over 90% of the projected cash proceeds will be returned to investors by mid 2021.
Rob King, the company’s chairman, said “Although we have made significant inroads into returning capital, we are very much aware that the next portion of the portfolio potentially becomes more difficult to dispose of and the reality is that some of the assets may need to be held to maturity, or past the 90% return of capital estimate of mid 2021, in order to obtain an acceptable exit valuation. We will continue to work with the investment manager to obtain orderly exits for all of the remaining assets.
The board are mindful of the cost of running a listed entity, hence we have been proactive in managing the costs of operating the company. We will continue to monitor the return of capital estimates and at the appropriate time we will provide a recommendation to shareholders on the future structure of the company. In the meantime, we feel that continuing to return capital at base case valuations or better as expeditiously as possible remains the key approach for the company.”
CCSL : Chenavari Capital Solutions hit by discount widening