18th Jun 2019 14:09
(Alliance News) - RDL Realisation PLC on Tuesday said 2018 had been "another disappointing year for the company" and raised concerns about the actions of its former investment manager.
The investment company is pursuing a managed wind-down with the goal of realising all of its investments, and its net asset value per share dropped 44% to USD7.49 at the end of 2018 from USD13.38 at the end of 2017
The company did, however, increase its total dividends per share substantially to 288.21 pence from 101.76p. Adjusting for capital returns and dividends, the NAV return was negative 6.4% in USD terms.
RDL used to be named Ranger Direct Lending Fund PLC and was managed by Ranger Alternative Management II LP. In late 2018, Ranger Alternative Management gave notice of its intent to terminate its contract with RDL in February 2019. International Fund Management Ltd was appointed as RDL's new investment manager.
The company's entire board has been changed since its previous annual report.
Chair Dominik Dolenec, who joined the firm in July last year, said: "The new board was disappointed to discover that a number of other platform exposures were not monitored or managed in what the new board would consider a prudent manner by Ranger. This was the case in at least two lending platforms which are among the largest positions in the fund. In both cases, in our opinion, many established practices in the lending industry were not followed, such as diligent monitoring, appropriate cash controls, detailed, frequent and timely reporting and the retention of back-up servicers.
"Certain legal agreements required by the loan documentation and agreed to by borrowers, for example cash control agreements, were also not implemented and enforced, and this may have been to the detriment of the company's shareholders. The new board is endeavouring to rectify many of these deficiencies and preserve capital."
The company has also had issues with its investment in Princeton Alternative Income Fund LP and its former general partner Princeton Alternative Funding LLC, which filed bankruptcy petitions in 2018. RDL expects to recover around USD15 million from the Princeton bankruptcy and has impaired its investment by USD13.5 million.
Dolenec said: "A great deal of effort has gone into prudently winding down the portfolio and transitioning the management away from Ranger and implementing the procedures and controls we believe are appropriate for the company. Whilst much work still remains to be done, we are pleased with our team's efforts in spite of the challenges we have faced in the portfolio we have inherited.
"In 2019, we hope to realise a substantial part of the remaining assets and return the proceeds to our Shareholders. We will also continue to streamline management and other administrative costs. With that in mind, we might also delist our shares in the future."
Shares in RDL were up 2.7% at 384.07 pence on Tuesday.
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