27th Jan 2021 13:36
KKV Secured Loan Fund Ltd - equipment leasing and asset finance investment firm - Reports very steep drop in net asset value per share in its financial year ended June 30 with NAV per ordinary share dropping 62% to 36.19 pence as at June 30 from 94.91p a year before. NAV per 2016 C share fell a less sharp 31% year-on-year to 68.17p on June 30 from 98.15p
This predominantly results from a substantial increase in expected credit loss provision to GBP230.5 million from only GBP4.4 million a year before. In August, portfolio manager KKV Investment Management Ltd said it had identified concerns regarding the valuation of some assets in the fund's portfolio.
A third-party expert has independently valued 6 of the anaerobic digestion businesses within KKV Secured Loan Fund's portfolio to determine loss severity on related debt investments made by the company. The anaerobic digestion plants that the fund finances use waste to produce fertilisers and electricity or gas.
The expert was asked to verify information on other investments as well, to assist in setting appropriate provisions, and its scope included a further 12 investments on top of the 6 original plants. Additionally, impairments of GBP9.6 million were recognised in the financial year compared to no impairments in financial 2019.
In January, KKV Secured Loan Fund requested a temporary share suspension until publication of its results, having missed the December 31 deadline. The company's new investment objective is to realise all remaining assets in portfolio of both share classes and return cash to shareholders. It has suspended dividends, having paid out 5.44p per share for both share classes in financial 2020, after 6.65p per ordinary and 6.19p per C share payouts in financial 2019.
Chair Peter Niven: "The portfolio manager considers that the most challenging period may still be ahead of us, with Q1 and Q2 2021 presenting continued risks to our borrowers. We shall, of course, keep investors informed of any developments as they occur."
Current stock price: Suspended
By Anna Farley; [email protected]
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