GCP Asset Backed ends all offer talks, will start handing back cash

Since GCP Asset Backed Income announced a strategic review on 13 December 2023, the board received several approaches from third parties to acquire the company. The board gave several of them access to detailed due diligence information. None of the potential offerors made a proposal at a level which, in the board’s opinion and taking into account advice from advisers and shareholders’ views, was enough to recommend to shareholders. The board is no longer actively considering a sale of the company at this time.

The board also received a number of proposals relating to a sale of all or substantially all of the portfolio. The board is still considering some of these and is open to others.

Cash back

The company has received £23.3m from the repayment of a loan secured against a portfolio of student accommodation projects in Australia (£20.9m of principal and £2.4m of outstanding interest and fees). The cash proceeds were 3% more than the value of the loan in the NAV at 31 March 2024. The company has also received a £4.0m partial repayment of a further loan secured against a student accommodation asset in the UK. The company is actively negotiating the redemption of the remaining balance of this facility, with completion anticipated in Q3 2024.

Following these repayments, the cash balance is expected to be approximately £103m. There remain no outstanding balances under the revolving credit facility.

The company intends to make an initial capital distribution totalling (after expenses) at least £85m by way of a compulsory partial redemption of ordinary shares at a price of 89.66875 pence per ordinary share (equivalent to NAV less the dividend of 1.58125p declared in respect of the period to 31 March 2024). Costs and expenses are expected to be about £45,000.

The redemption date will be 10 June 2024. 22.5% of shareholders’ holdings would be redeemed or about 94.8m shares in total. Payment should be on or close to 24 June 2024.

GABI : GCP Asset Backed ends all offer talks, will start handing back cash