TIDMECT
Contact:
Oak Fund Services (Guernsey) Limited
Company Administrator
Attn: Tracy Lewis
Tel: +44 1481 723450
Eurocastle Releases First Half 2022 Financial Results and
Announces Annual General Meeting on 8 September 2022
Guernsey, 9 August 2022 -- Eurocastle Investment Limited
(Euronext Amsterdam: ECT) today
https://www.globenewswire.com/Tracker?data=Ewm5ULexUWrQBY7cj7PWwlaWkfGw7VeFXe4jL0iYhWSvoZ0kTxyBuRHgNaUZYo42
has released its financial report for the six months ended 30 June
2022.
-- Q2 ADJUSTED NET ASSET VALUE ("NAV")1 of EUR18.9 million, or EUR10.16 per
share2, down EUR0.37 per share vs. EUR10.53 per share at Q1 2022 (up
EUR0.37 per share since 31 December 2021) due to:
1. Valuation increases:
-- EUR0.06 per share, or 8% increase in Q2 2022 (EUR0.08 per
share increase in H1 2022) on the valuation of the
remaining two NPL and other loan interests.
-- EUR0.04 per share, or 4% decrease in Q2 2022 (no movement
in H1 2022) on the valuation of the remaining two real
estate fund investments.
2. Recognition of tender offer costs in Q2 2022 of EUR0.38 per share.
3. No movement in reserves in Q2 2022 (release of EUR0.68 per share
of reserves in H1 2022).
-- TER OFFER
On 8 July 2022, the Company announced the conclusion of the
strategic review and the decision to relaunch the Company's
investment activity (the "Relaunch"). It also announced a tender
offer to provide a liquidity opportunity for those shareholders who
did not wish to participate in the Relaunch (the "Tender Offer").
The Tender Offer was set at a price of EUR10.26 per share, a 28%
premium to the closing share price of EUR8.00 per share on 6 July
2022, and the maximum share buyback price authorised by the
Company's shareholders.
On 20 July 2022, the Company held a general meeting (the
"General Meeting") to vote on a resolution to waive the requirement
for the Company's Manager and its affiliates (the "FIG Concert
Party") to make a general offer for the Company should their
ownership interest in the Company exceed 30% as a result the Tender
Offer. This resolution was passed and as a result the Tender Offer
proceeded and closed on 4 August 2022 with 67% of eligible shares
tendered, resulting in Eurocastle accepting 864,980 shares in
exchange for EUR10.26 of cash per share tendered, or EUR8.9 million
in total.
H1 2022 BUSINESS HIGHLIGHTS
Q2 Cash
Q1 2022 NAV Movement Q2 FV Movement Q2 2022 NAV
-------------- --------------- --------------- --------------
EUR EUR EUR EUR
EUR per EUR per EUR per EUR per
million share million share million share million share
Real Estate
Funds 1.9 1.00 - - (0.1) (0.04) 1.8 0.96
Italian NPLs &
Other Loans 1.3 0.71 (0.1) (0.04) 0.1 0.06 1.3 0.72
Net Corporate
Cash(3) 16.4 8.82 0.1 0.04 (0.7) (0.38) 15.7 8.48
Adjusted NAV 19.6 10.53 - - (0.7) (0.37) 18.9 10.16
============== ======= ===== ======= ====== ======= ====== ======= =====
H1 2022 Overview
During H1 2022, the Company continued to make progress on
realising its remaining assets as part of its Realisation Plan with
41% of its YE 2021 NAV relating to investments realised in the
period. As at 30 June 2022, the Company's investments comprised of
two RE Fund Investments and two NPL pools with a NAV of EUR3.1
million, or 10% of the Company's NAV.
Investment Realisations & Highlights
-- During H1 2022, the Company realised EUR2.1 million from its investments,
of which EUR1.9 million came from its Real Estate Funds (52% of their YE
2021 NAV) and EUR0.1 million from its minority NPL and Other Loan
holdings (11% of their YE 2021 NAV).
-- RE Redevelopment Funds -- REFI II & REFI V:
-- In REFI II, all units have been sold and the fund is now in
liquidation. In REFI V, assuming all units currently under
contract successfully close, only 3% of units will remain to be
sold.
-- During H1 2022, Eurocastle received EUR1.9 million comprising (i)
EUR1.0 million from REFI II (70% of its YE 2021 NAV) and (ii)
EUR1.0 million from REFI V (42% of its YE 2021 NAV).
Additional Reserves:
The Company reduced these reserves from EUR14.8 million to
EUR12.8 million during the period. The reduction of EUR2.0 million
reflects EUR0.7 million of reserves being utilised, in line with
anticipated costs, and a release of EUR1.3 million of the existing
reserves in H1 2022. The majority of this release relates to the
legacy German tax matter following a revision to the Company's
estimated total liability. As at 30 June 2022, of the total
Additional Reserves of EUR12.8 million, EUR6.7 million related to
the legacy German tax matter with the balance of approximately
EUR6.1 million in place to allow for an orderly liquidation
process.
-- As previously announced, the Company made a payment of EUR4.6 million in
March 2022 in relation to the legacy German tax matter against which it
raised a corresponding tax asset. The current remaining financial impact
(excluding associated costs of EUR0.2 million) is estimated to be between
EUR1.7 million and EUR1.9 million. Notwithstanding the Company's
expectation that the tax matter will eventually be resolved in the
Company's favour, as at 30 June 2022, the full potential liability is
fully reserved for within the Additional Reserves.
Subsequent Events To 30 June 2022:
Tender Offer
As stated above, the Tender Offer closed on 4 August 2022 and
the Company bought back 864,980 shares, or EUR8.9 million,
resulting in a current share count at the date of this announcement
of 992,555.
Investment Realisations
Subsequent to H1 2022, the Company received EUR1.5 million from
its investments, or just under half of the Company's total Q2 2022
NAV for its investments, comprising:
-- EUR1.3 million from REFI V, or 90% of its Q2 2022 NAV.
-- EUR0.3 million from one of the two remaining NPL pools following the
completion of its sale on 29 July 2022 in line with its Q2 22 NAV.
Following these distributions, Eurocastle's remaining Q2 '22 NAV
for all of its investments would be EUR1.6 million, or 8% of the
Company's Adjusted NAV, which is expected to be realised within the
next 15 months.
Net Available Cash for Relaunch
Taking into account the Tender Offer settlement and cash flows
received from the investments subsequent to H1 2022, the Company
has a cash position of EUR17.8 million and approximately EUR8.4
million of net available cash to commence seeking new investments
under the new investment strategy.
The tables below show the Company's balance sheet and Net
Corporate Cash as at 30 June 2022 as well as pro forma for the
Tender Offer and investment cash flows received subsequent to H1
2022.
Q2 2022 NAV PRO FORMA FOR
Q2 2022 NAV TER & Q3 REALISATIONS
-------------------------- ---------------------------
EUR per
EUR million EUR per share EUR million share
Investments 3.1 1.68 1.6 1.61
Cash 25.2 13.54 17.8 17.94
German Tax(1)
and Other
Assets 4.7 2.53 4.7 4.73
-------------- ----------- ------------- ------------- ------------
Total Assets 33.0 17.75 24.1 24.28
-------------- ----------- ------------- ------------- ------------
Accrued
Liabilities (1.3) (0.72) (1.3) (1.34)
-------------- ----------- ------------- ------------- ------------
IFRS NAV 31.6 17.04 22.8 22.94
-------------- ----------- ------------- ------------- ------------
Liquidation
Cash
Reserves (6.1) (3.30) (6.1) (6.17)
Legacy German
Tax Cash
Reserve (2.0) (1.08) (2.0) (2.02)
Legacy German
Tax Asset
Reserve(4) (4.6) (2.50) (4.6) (4.68)
Adjusted NAV 18.9 10.16 10.0 10.07
============== =========== ============= ============= ============
Share count 1,857,535 992,555
----------- ------------- ------------- ------------
Q2 2022 NET CORPORATE CASH
Q2 2022 NET CORPORATE PRO FORMA TER & Q3
CASH REALISATIONS
-------------------------- ---------------------------
EUR per
EUR million EUR per share EUR million share
Cash 25.2 13.54 17.8 17.94
Other Assets 0.1 0.03 0.1 0.05
Accrued
Liabilities (1.3) (0.72) (1.3) (1.34)
Liquidation
Cash
Reserves (6.1) (3.30) (6.1) (6.17)
Legacy German
Tax Cash
Reserve (2.0) (1.08) (2.0) (2.02)
-------------- ----------- ------------- ------------- ------------
Net Corporate
Cash 15.7 8.48 8.4 8.46
-------------- ----------- ------------- ------------- ------------
Share count 1,857,535 992,555
----------- ------------- ------------- ------------
Income Statement for the Six and Three Months ended 30 June 2022
(unaudited)
H1 2022 Q2 2022
EUR Thousands EUR Thousands
------------------------------------------- ------------- -------------
Portfolio Returns
-------------------------------------------
Italian NPLs & Other Loans 152 104
Real Estate Funds (5) (82)
------------------------------------------- ------------- -------------
Fair value movement on Italian investments 147 22
Loss on foreign currency translation (2) (1)
-------------
Total gain 145 21
------------------------------------------- ------------- -------------
Operating Expenses
-------------------------------------------
Interest expense 11 6
Manager base and incentive fees 75 26
Remaining operating expenses 635 303
------------------------------------------- ------------- -------------
Other Operating expenses 710 329
------------------------------------------- ------------- -------------
Total expenses 721 335
------------------------------------------- ------------- -------------
Net loss for the period (576) 314
EUR per share (0.31) (0.17)
------------------------------------------- ------------- -------------
Balance Sheet and Adjusted NAV Reconciliation as at 30 June
2022
Italian
Investments Corporate Total
EUR Thousands EUR Thousands EUR Thousands
---------------------------
Assets
Cash and cash equivalents - 25,153 25,153
Other assets - 50 50
Tax Asset - 4,645 4,645
Investments:
Italian NPLs & Other
Loans 1,347 - 1,347
Real Estate Funds 1,780 - 1,780
Total assets 3,127 29,848 32,975
Liabilities
Trade and other payables - 545 545
Tender offer costs - 710 710
Manager base and incentive
fees - 74 74
--------------------------- -------------- -------------- --------------
Total liabilities - 1,329 1,329
IFRS Net Asset Value 3,127 28,519 31,646
---------------------------- -------------- -------------- --------------
Liquidation cash reserves - (6,122) (6,122)
Legacy German tax cash
reserve (2,006) (2,006)
Legacy German tax asset
reserve(5) - (4,645) (4,645)
Adjusted NAV 3,127 15,746 18,873
Adjusted NAV (EUR per Share) 1.68 8.48 10.16
---------------------------- -------------- -------------- --------------
Tender Offer settlement - (8,875) (8,875)
Distributions received subsequent to Q2 2022 (1,530) 1,530 -
--------------------------------------------- ------- ------- -------
Q2 2022 PRO FORMA ADJUSTED NAV 1,597 8,401 9,998
---------------------------------------------- ------- ------- -------
EUR per Share based on 992,555 shares 1.61 8.46 10.07
ANNUAL GENERAL MEETING
The Company will hold its Annual General Meeting on Thursday, 8
September 2022, at the Company's registered office at 3:00 pm
Guernsey time (4:00 pm CET). Notices and proxy statements will be
posted on 24 August 2022 to shareholders of record at close of
business on 23 August 2022.
NOTICE: This announcement contains inside information for the
purposes of the Market Abuse Regulation 596/2014.
ADDITIONAL INFORMATION
For investment portfolio information, please refer to the
Company's most recent Financial Report, which is available on the
Company's website (www.eurocastleinv.com).
Terms not otherwise defined in this announcement shall have the
meaning given to them in the Circular.
ABOUT EUROCASTLE
Eurocastle Investment Limited ("Eurocastle" or the "Company") is
a publicly traded closed-ended investment company. On 18 November
2019, the Company announced a plan to realise the majority of its
assets with the aim of accelerating the return of value to
shareholders. On 8 July 2022, the Company announced the relaunch of
its investment activity with the aim to build a Southern European
speciality finance and real estate platform. For more information
regarding Eurocastle Investment Limited and to be added to our
email distribution list, please visit www.eurocastleinv.com.
FORWARD LOOKING STATEMENTS
This release contains statements that constitute forward-looking
statements. Such forward-looking statements may relate to, among
other things, future commitments to sell real estate and
achievement of disposal targets, availability of investment and
divestment opportunities, timing or certainty of completion of
acquisitions and disposals, the operating performance of our
investments and financing needs. Forward-looking statements are
generally identifiable by use of forward-looking terminology such
as "may", "will", "should", "potential", "intend", "expect",
"endeavour", "seek", "anticipate", "estimate", "overestimate",
"underestimate", "believe", "could", "project", "predict",
"project", "continue", "plan", "forecast" or other similar words or
expressions. Forward-looking statements are based on certain
assumptions, discuss future expectations, describe future plans and
strategies, contain projections of results of operations or of
financial condition or state other forward-looking information. The
Company's ability to predict results or the actual effect of future
plans or strategies is limited. Although the Company believes that
the expectations reflected in such forward-looking statements are
based on reasonable assumptions, its actual results and performance
may differ materially from those set forth in the forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause the Company's actual
results in future periods to differ materially from forecasted
results or stated expectations including the risks regarding
Eurocastle's ability to declare dividends or achieve its targets
regarding asset disposals or asset performance.
(1) In light of the Realisation Plan announced in November 2019,
the Adjusted NAV as at 30 June 2022 reflects additional reserves
for future costs and potential liabilities, which have not been
accounted for under the IFRS NAV. No commitments for these future
costs and potential liabilities existed as at 30 June 2022. IFRS
NAV as at 30 June 2022 was EUR31.6 million or, EUR17.04 per
share.
(2) Per share calculations for Eurocastle throughout this
document are based on 1.9 million shares unless otherwise
stated.
(3) Reflects corporate cash, plus other assets, net of
liabilities and additional reserves.
(4) In March 2022, the Company made a payment of EUR4.6 million
in relation to the legacy German tax matter. Notwithstanding the
Company's expectation that the tax matter will eventually be
resolved in the Company's favour, as at 30 June 2022, this tax
asset was fully reserved for within the Additional Reserves.
(5) In March 2022, the Company made a payment of EUR4.6 million
in relation to the legacy German tax matter. Notwithstanding the
Company's expectation that the tax matter will eventually be
resolved in the Company's favour, as at 30 June 2022, this tax
asset was fully reserved for within the Additional Reserves.
(END) Dow Jones Newswires
August 09, 2022 02:00 ET (06:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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