11th Feb 2015 08:05
LONDON (Alliance News) - Electra Private Equity PLC on Wednesday said it has completed its review of its capital structure, distribution policy and fee arrangements with Electra Partners LLP, with changes made to its management fees and its financing facilities and the implementation of a dividend policy.
FTSE 250-listed Electra Private Equity said its current annual management fee paid to Electra Partners, currently at 1.5% of gross assets, will change from April 1. After that date, no fee will be paid on cash, and the management fee on non-core listed and primary fund investments will reduce to 1%, it said. It added that if applied to the year ended September 30, that would have brought down its fee by GBP7 million.
The group said its multi-currency revolving credit facility, which had GBP154 million outstanding at the end of January, will be repaid in full, cutting financing costs for Electra by GBP4 million per year. Electra said it will redraw the facility in the future as required in order to facilitate new investments or meet ongoing expenses.
Electra said it is content to accept the additional currency exposure this debt repayment will bring but said its foreign currency exposure will be kept under review.
The private equity group also said it is to implement a dividend policy to return to shareholders a targeted 3% of its net asset value per annum via a cash dividend or share buyback.
"I am pleased that the board has concluded its review which has rightly involved tough and rigorous negotiations. We believe the new agreement with Electra Partners delivers improved value for all of our shareholders, while also keeping sufficient incentives and the financial means to continue our successful investment strategy," said Electra Chairman Roger Yates.
By Sam Unsted; [email protected]; @SamUAtAlliance
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