24th Apr 2018 17:17
LONDON (Alliance News) - Ranger Direct Lending Fund PLC said Tuesday that a letter published by Oaktree Capital Management LP was "driven by its own short-term interests".
Oaktree has an 18.56% interest in Ranger Direct, making it the company's second largest shareholder.
On April 11, Oaktree sent a letter to Ranger which said: "We have now come to the conclusion that RDL shareholders' interests are best served by winding down the company and returning its capital to its shareholders, which represents both the lowest risk and highest return path forward."
Oaktree Managing Director & Portfolio Manager Patrick McCaney said: "Oaktree has further deliberated about Ranger's future and how we can best support the company and its board. In light of your invitation for Oaktree to make a proposal for the investment management contract, we contemplated a range of possibilities for Ranger including a continuation of or change in strategy based on information available in the public domain.
"Unfortunately, after careful consideration we could not see a viable path forward that either Oaktree or indeed any other investment manager could propose for the vehicle for a number of fundamental reasons."
McCaney's reasons included Ranger being "too small" and it operates in a "niche asset class". He was also "highly troubled" by Ranger's exposure to Princeton and its ongoing legal process "with no end in sight".
Ranger responded to the release of the "private correspondence" by informing the market that the letter - dated April 11 - was not the last contact between the pair.
"They relayed the "conclusion" that a winding down was the best way forward for the company. Since the receipt of Oaktree's letter, the company and its advisors have communicated to Oaktree that all of the relevant issues raised by Oaktree are already being dealt with as part of the review process. The only conclusion which can be drawn from this sequence of events is that Oaktree had no serious interest in engaging in the review process and their course of action was solely driven by their short-term considerations," said Ranger.
Ranger continued: "The review process has considered the possibility of a full or partial winding down of the company's activities and returning cash to shareholders. The board has a duty to act in the interests of all shareholders and, therefore, must seek to achieve the best capital value for the company's assets and protect dividend flows. In the view of the board, Oaktree's approach will accomplish neither of those objectives and lead to an extended period of uncertainty for shareholders. In respect of capital value and dividend flows the board reiterates its view that Oaktree's approach is driven by its own short-term interests."
Shares in Ranger closed up 7.1% to 810.00 pence each Tuesday.
Related Shares:
RDL.L