- •Keybridge has received USD29.7 million from the sale of last remaining aircraft investment
- •Corporate debt facility to be repaid in full
- •Private equity restructure completed
- •Net assets $43.6 million*
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Keybridge is pleased to announce that it has today received USD29.7 million from the sale of its three
remaining aircraft securing the Company's aircraft investments. The amount realised was at a USD0.4
million discount to Keybridge's book value as at 31 December 2012. There was also a negative
carrying value consequence (of USD0.3 million) arising from a related transaction described below.
To incentivise the manager of the abovementioned aircraft to complete the aircraft sale, Keybridge
agreed to a restructure of its private equity asset in favour of Republic Financial Corporation (RFC), the
manager of both its aircraft and private equity assets. The restructure involved the sale of the private
equity asset for USD4.3 million to RFC, fully funded by a Keybridge loan recourse only to the asset
sold. The loan accrues at 14.5% pa capitalised monthly with a 31 December 2017 maturity. The
private equity transaction was completed contemporaneously with the aircraft sale, and is consistent
with the market update announcement on 10 April 2013. No cash was derived from the transaction,
and the sale was at a USD0.3 million discount to 31 December 2012 book value. The economic
outcome of this restructure is that USD0.3 million of book value and any upside in excess value of the
relevant asset above the accruing interest rate has been transferred to RFC.
Following this aircraft repayment, Keybridge will fully repay its corporate debt facility, which currently
stands at USD19.0 million. This repayment represents a significant milestone for the Company and
follows an orderly realisation of its investment portfolio and gradual repayment of its corporate debt
facility that commenced in September 2009. Post repayment, which is expected to occur this week,
Keybridge will hold a cash balance of $13.5 million.
With the full retirement of the corporate debt, the Board will now consider the strategic direction of the
Company, with all options being canvassed. These options will range from a continuation of the
gradual wind down process over an appropriate period to a reinvigoration of the group by capital raising
and recommencement of investment activities. The Board will continue to keep shareholders fully
informed as this process develops.
*Net assets of $43.6 million are based on 31 December 2012 carrying values of assets. Keybridge
notes that subsequent to this date, its $12 million mezzanine loan to PR Finance Group (PRFG) has
stopped performing and the valuation of the asset is subject to various transactions including the
possible sale of the PRFG's largest asset and a Scheme of Arrangement with Keybridge. The net asset
position also includes a provision for the potential payment of $4.35 million in franking deficit tax as
outlined in the Company's announcement of 2 April 2013. This payment, if required, would be met from
cash reserves.
