TIDMSCRF
RNS Number : 6635I
SME Credit Realisation Fund Limited
03 April 2020
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES OR TO US PERSONS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED UNDER
THE MARKET ABUSE REGULATION (EU) NO. 596/2014.
*****
3 April 2020
SME Credit Realisation Fund Limited
(the "Company")
Company Update
The Board provides the following update following its
preliminary assessment of the potential implications of the
COVID-19 pandemic.
Whilst the future performance of the Company's underlying loans
may be adversely affected by COVID-19, in common with many other
forms of corporate lending, the Board is pleased to report further
positive progress in the Company's winding-down with returns of
cash to shareholders of c. GBP22 million intended to be declared
for payment in May 2020.
Returns to shareholders
The Company intends to continue returning surplus cash to
shareholders on a quarterly basis; that is broadly speaking loan
principal and interest receipts, less operating expenses, less
leverage costs and repayments, less any FX margin reserve
maintenance requirements.
Dividend declaration
The Company will pay a quarterly dividend of 1.3125 pence per
share in May 2020. Details of the timetable for the dividend
payment will be published in the next few days.
Compulsory partial redemption of Shares
In addition to the dividend, the Company will return
approximately GBP18.5 million to shareholders by way of a
compulsory partial redemption of shares. Again, further details of
the partial redemption of shares will be published in the next few
days.
The Company and its advisers will continue to review how and
when capital is returned to shareholders, which may change over the
course of time.
Delay to publication of the Company's NAV
As a result of the uncertainty caused by COVID-19 the Company
has decided to delay the publication of its NAV as at 31 March 2020
which otherwise would have been released mid-April. The Company
will publish the NAV when market conditions stabilise sufficiently
to allow the establishment of detailed forward-looking assumptions
based on evolving market data and thus facilitate the calculation
of a reliable NAV.
Pending publication of the Company's NAV as at 31 March 2020,
the Board has resolved to suspend share repurchases.
It is the Board's intention to be as transparent as possible
with shareholders through this period of uncertainty and we will
continue to provide updates at appropriate junctures.
Active risk management and focus on collections
The Board continues to work closely with its advisers and
Funding Circle to manage the Company's portfolio and ensure that
appropriate steps are being taken to mitigate risk and achieve the
best outcome for both investors and borrowers.
The Company hedges USD and EUR exposure to GBP and maintains a
prudent FX reserve margin which has been increased further in light
of recent FX volatility; this reserve is actively monitored and
maintained along with management of liquidity requirements deriving
from other operating expenses and financial liabilities. The
Company will continue to hedge USD and EUR exposure to GBP. The
Company has provided additional detail on its current borrowings
below under the section "Leverage".
Funding Circle has taken wide-ranging business contingency steps
already and will continue to respond to COVID-19 as the environment
develops. Funding Circle employees have successfully switched to
working from home which has been readily facilitated by a
pre-existing technology-focused infrastructure. Servicing,
collections and recoveries capabilities have been materially
enhanced with increased headcount and training as well as
pre-emptive on-boarding of additional third party capacity should
it be required.
Funding Circle's business model is built on the need for a
well-functioning financial system for SME borrowers and lenders and
is working to provide a flexible and pragmatic approach to its
collections activities to both support borrowers and to protect
investor returns, in line with governmental and regulatory
guidance.
Portfolio disposals
The Company announced in early February 2020 that having run an
auction process over the preceding months the Board were pursuing a
potential sale of a portion of its assets. It is still the
Company's intention to effect a sale of a portion of its assets and
the Company continues to engage with potential buyers. That said,
given the current market volatility and uncertainty caused by
COVID-19, it is likely the asset sales shall be delayed, or may not
proceed at all.
Leverage
As at 31 March 2020, the Company's outstanding borrowings were
approximately GBP56 million on a look-through basis, which equates
to a debt to equity ratio of 22% based on the Company's 31 December
2019 NAV of approximately GBP259 million. All of the Company's
leverage facilities are in amortisation with the majority of
cashflows from loans held within the respective SPVs being
prioritised to reduce the Company's borrowings.
Transition to fair value accounting
As referenced in the Company's interim report published in
December, the Company has, as a result of the Company's business
model changing, with effect from its FY20/21 beginning 1 April 2020
moved to fair value accounting for the loans it holds. The Company
therefore expects to publish its NAV from and including as at 30
June 2020 using fair value methodology, which will involve the
application of a discount rate implied by market comparables to the
expected cashflows from the Company's loan portfolio. Further
details, including potential variance in NAV, will be disclosed in
the Company's FY19/20 annual report scheduled for publication in
July.
CONTACTS
Richard Boleat, Chairman
+44 (0) 1534 615 656
Richard.Boleat@smecreditrealisation.com
Secretary and Administrator
Sanne Group (Guernsey) Limited
+44 (0) 1481 739810
smecreditrealisation@sannegroup.com
Corporate Broker
Numis Securities
Nathan Brown
George Shiel
+44 (0) 207 260 1000
n.brown@numis.com
Investor Relations
IR@smecreditrealisation.com
Website
www.smecreditrealisation.com
The ISIN number of the Ordinary Shares is GG00BKX9MJ69, the
SEDOL code is BKX9MJ6 and the TIDM is SCRF.
The LEI number of the Company is 549300ZQIYQVNIZGOW60.
*****
ABOUT SME CREDIT REALISATION FUND LIMITED
The Company is a registered closed-ended collective investment
scheme registered pursuant to the Protection of Investors
(Bailiwick of Guernsey) Law, 1987, as amended and the Registered
Collective Investment Scheme Rules 2018 issued by the Guernsey
Financial Services Commission ("GFSC").
*****
IMPORTANT NOTICES
This announcement contains "forward-looking" statements, beliefs
or opinions. These forward-looking statements involve known and
unknown risks and uncertainties, many of which are beyond the
control of the Company and all of which are based on its directors'
current beliefs and expectations about future events.
Forward-looking statements are sometimes identified by the use of
forward-looking terminology such as "believes", "expects", "may",
"will", "could", "should", "shall", "risk", "intends", "estimates",
"aims", "plans", "predicts", "projects", "continues", "assumes",
"positioned" or "anticipates" or the negative thereof, other
variations thereon or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events, assumptions or
intentions. These forward-looking statements include all matters
that are not historical facts. Forward-looking statements may and
often do differ materially from actual results. They appear in a
number of places throughout this announcement and include
statements regarding the intentions, beliefs or current
expectations of the Board or the Company with respect to future
events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to the Company's
business concerning, amongst other things, the financial
performance, liquidity, prospects, growth and strategies of the
Company. These forward-looking statements and other statements
contained in this announcement regarding matters that are not
historical facts involve predictions. No assurance can be given
that such future results will be achieved; actual events or results
may differ materially as a result of risks and uncertainties facing
the Company. Such risks and uncertainties could cause actual
results to vary materially from the future results indicated,
expressed or implied in such forward-looking statements. The
forward-looking statements contained in this announcement speak
only as of the date of this announcement. Nothing in this
announcement is, or should be relied on as, a promise or
representation as to the future. The Company disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained in this
announcement to reflect any change in its expectations or any
change in events, conditions or circumstances on which such
statements are based unless required to do so by applicable law,
the Prospectus Rules, the Listing Rules or the Disclosure Rules and
Transparency Rules of the FCA. No statement in this announcement is
intended as a forecast or profit estimate.
Neither this announcement nor any copy of it may be made or
transmitted into the United States of America (including its
territories or possessions, any state of the United States of
America and the District of Columbia) (the "United States"), or
distributed, directly or indirectly, in the United States or to US
Persons (as such term is defined in Regulation S under the US
Securities Act of 1933, as amended (the "Securities Act"). Neither
this announcement nor any copy of it may be taken or transmitted
directly or indirectly into Australia, Canada, Japan or South
Africa or to any persons in any of those jurisdictions, except in
compliance with applicable securities laws. Any failure to comply
with this restriction may constitute a violation of United States,
Australian, Canadian, Japanese or South African securities laws.
The distribution of this announcement in other jurisdictions may be
restricted by law and persons into whose possession this
announcement comes should inform themselves about, and observe, any
such restrictions. This announcement does not constitute or form
part of any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for securities
in the United States, Australia, Canada, Japan or South Africa or
in any jurisdiction to whom or in which such offer or solicitation
is unlawful.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDBLLLBBZLLBBD
(END) Dow Jones Newswires
April 03, 2020 02:00 ET (06:00 GMT)
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