KKV Secured Loan secures an exit and an NAV uplift – Finally, some better news for investors in KKV Secured Loan as it reports that it has received net proceeds of $24.3m from the refinancing of two existing investments in a US based reinsurance company. These investments are referred to as Borrowers 7 and 9 in the company’s annual report for the year ended 30th June 2020.
The two investments were only held by KKV Secured’s ordinary share class. The portfolio manager has been engaging actively with the borrower for some months to encourage them to repurchase their debt.
The net proceeds represent a repayment of 60% of the principal outstanding [which, quite frankly, is a pretty poor result]. Nevertheless, the loans were valued at zero as at the end of June 2020 and the portfolio manager expects this repayment to add approximately 4.91p or 13.6% to the NAV per ordinary share (based off the last published NAV of 36.19p as at 30th June 2020). The settlement of this loan will also provide an opportunity for repayment of the inter-share class loan between the ordinary share class and C share class and commencement of cash repayments sooner than anticipated from the ordinary share portfolio.
A meeting of the board is scheduled to take place next week where consideration will be given to determining an amount of capital to be returned to both the ordinary share class and the C share class. A further announcement will be made after the board meeting.
[Extracting some value from these loans, which were not due to mature for about another six years, is a tick in the box for the new management team. At last night’s close, the ordinary shares were valued at 15.55p. We’d expect them to jump in price later.]
KKVL : KKV Secured Loan secures an exit and an NAV uplift