Keybridge Capital Limited

Media Releases

Market Update
3 August 2012

  • Keybridge realises $2 million from sell down of existing loan transaction
  • Keybridge to receive an estimated US$5.7 million as an interim distribution from its participation in a US Private Equity Fund

Keybridge Capital is pleased to announce that it has recently realised $2 million from the sell down at book value of a minority participation in one of the Company's existing domestic lending transactions. Keybridge remains the majority financier in this transaction and is now exploring various options with the new financier and our borrower on the future on this asset.

We are also pleased to advise that the Company anticipates receiving approximately US$5.7 million by the end of August 2012 as an interim distribution from its interest in a US domiciled closed-end private equity fund ("RPE No 1 Fund") managed by its investment partner Republic Financial Corporation of Denver, Colorado ("RFC"). RFC is a significant partner in the Fund and is also the parent company of Keybridge's aviation asset manager and partner, GMT Global Republic Aviation Ltd.

Keybridge invested a total of US$6.85 million into this Fund through the second half of 2007 and early 2008. The Company's book value as at 31 December 2011 of this investment was US$7.2 million having not accrued any income on this asset since June 2009. The Fund holds ordinary and preference capital in five private US- domiciled manufacturing businesses which, while showing positive signs of improving financial health over the past 18 months, have all experienced very challenging times over the past three years dealing with the downturn in the US domestic economy. This Fund has accordingly not made any distributions to Keybridge since December 2008.

RFC has formally advised Keybridge that it has now achieved financial close for the disposal of one of the Fund's current investee companies. The initial cash distribution due to Keybridge will be approximately US$5.7 million. A further amount of approximately US$0.7 million is expected to be paid to Keybridge in 18 months' time, pending satisfaction of transaction conditions.

This distribution in pre-tax terms recovers 100% of Keybridge's total original participation in the Fund. Keybridge will then retain its economic interest in the Fund, supported by the remaining four operating businesses in which the Fund has invested. Future income from and/or realisations of these businesses will then be distributed to participants in accordance with the investment waterfall terms, thereby delivering Keybridge further possible income in the future. Keybridge is accordingly reviewing its carrying value for this investment as part of the completion of its annual results.

The proceeds from these realisations have and will be used to further reduce Keybridge's current corporate debt facility which, on receipt of the Fund's cash distribution, will be reduced to approximately US$30.8 million, and be supported by gross assets of approximately $80 million. This means that Keybridge will be required under the terms of our existing debt facility to realise a further approximately US$5.8 million by 31 December 2012 to achieve the milestone of US$25 million.

The Company is however continuing its discussions with investors and financiers with regard to a total refinancing of the Company's debt requirements. Such refinancing, if successful, will place the Company in a sound position to allow the Board to positively consider Keybridge's renewed future.

Keybridge will release its full year financial results for the year ended 30 June 2012 to the ASX on 14 August 2012.

Keybridge Capital is a financial services company that has invested in, or lent to, transactions which predominantly are in the core asset classes of property, aviation, shipping and infrastructure.


For further information, please contact:

Mark Worrall
Managing Director
Tel: +61 2 9321 9000