Chenavari Net Asset Value Falls As Returns Cash To Shareholders

LONDON (Alliance News) - Chenavari Capital Solution Ltd said Friday its full year net asset ...

Alliance News 12 January, 2018 | 6:03PM
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LONDON (Alliance News) - Chenavari Capital Solution Ltd said Friday its full year net asset value per share fell as the company makes progress in the "orderly disposal" of its investment portfolio.

The company's NAV per share declined to 92.91 pence per share at the end of September 30, falling 1.4% from 94.26p at the end of September 2016 net of distributions. The company's net asset value total return was 5.7%, up from the 4.2% achieved in the previous year.

Chenavari said the fall in net asset value per share was due to higher levels of cash held in the portfolio pending distributions and the requirement to hold cash to cover margin calls.

Chenavari has now revised its objective to return 90% of capital to the end of 2021 due to revised realisation projections. It now estimates it will return a further GBP30.0 million to GBP35.0 million to shareholders in 2018, having returned GBP27.8 million in the recently ended year.

The firm, which does deals with banks looking to cut capital-intensive risk assets to meet tougher regulations since the financial crisis, had originally planned to stop making new investments at the end of 2015 extended its investment period for another year to the end of 2016, and it is now realising its investment portfolio and returning the cash to shareholders.

Profit for the year was GBP6.5 million, up from GBP5.0 million the year before, on total net income of GBP8.3 million from GBP6.7 million. Total operating expenses were up slightly to GBP1.8 million from GBP1.7 million.

Looking ahead, Chairman Rob King said: "Whilst the first nine months of the realisation period have been challenging for the investment manager, I have been very pleased with its performance in navigating these difficult markets and obtaining positive returns on the disposals within the portfolio."

"I do not anticipate 2018 being any easier to predict and there will be continued focus on obtaining positive exit prices for realisation of our investments," King added. "The majority of the assets are trading at their base case scenarios or better and the board are optimistic that realisations will be in line with the projected scenarios."

Chenavari shares were down 0.9% at the close on Friday at 88.00 pence per share.

By George Collard;

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Chenavari Capital Solutions 77.75 GBX 0.00
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