Business Wire

EJF Sends Letter to Eurocastle Investment Requesting Change in Strategy and New Board Members

Jaa

EJF Debt Opportunities Master Fund, L.P., the beneficial owner of 26.2% of shares of Eurocastle Investment Limited (AMS:ECT) (“Eurocastle” or the “Company”), has today sent a letter to Eurocastle’s Board of Directors. This letter calls for a change in the Company’s strategic direction, raising concerns around the following five issues:

  • The Company’s position in doBank represents almost half its overall NAV
  • The Company continues to trade at a discount to NAV
  • The Board’s decision to hold approximately 27% of NAV in uninvested cash is excessive
  • The Company’s management fees related to its position in doBank, which is independently managed, are also excessive
  • The need for additional independent Board members

The full text of the letter is below:

24 May 2018

Eurocastle Investment Limited
Regency Court
Glategny Esplanade
St Peter Port
Guernsey, GY1 1WW
Channel Islands

Eurocastle Investment Limited Board of Directors:
Mr. Randal A. Nardsone
Mr. Jason Sherwill
Mr. Peter M. Smith
Dr. Simon J. Thornton
Ms. Claire Whittet

CC: Francesco Colasanti
Randal A. Nardone
Investor Relations

Dear Members of the Board of Directors of Eurocastle Investment Limited:

EJF Debt Opportunities Master Fund, L.P. (“EJF”) is the beneficial owner of 13,798,647 shares of Eurocastle Investment Limited (the “Company”), which represents approximately 26.2% of the voting share capital of the Company, excluding shares held in treasury. EJF has been a consistent shareholder in the Company during the past three years.

In our capacity as the largest shareholder of the Company, we write to express our concerns with the Company’s strategic direction regarding its position in the doBank Group (“doBank”) and its share price consistently trading at a discount to net asset value (“NAV”); the decision by the board of directors (the “Board”) to retain approximately 27% of NAV in cash; the charging of management fees on the Company’s position in doBank, which is independently managed; and the need for additional representation on the Board.

First, we believe the Company should seek to monetise its investment in doBank in the near term with a clear path to execution. The Company has pursued its core investment strategy and utilised proceeds, as outlined in its prospectus, in part, by acquiring doBank prior to its subsequent public market exit in 2017. Given that doBank is publicly listed and represents 49% of the Company’s total NAV, less accrued incentive fee of €34.5 million, each as of 31 March 2018, the Company should not hold half of its NAV in a single, exchange-traded position. If the Company’s shareholders want to own doBank, they may purchase the shares in the open market instead of paying FIG LLC (the “Manager”) a fee to make the same investment.

Due to the current embedded gain in the investment and the unpredictability of the equity markets, Italian political standings and banking regulation, we believe that monetisation is appropriate and may be achieved through the potential sale of doBank to a strategic buyer, which may potentially benefit doBank by adding non-performing loans to its portfolio over time. We note that affiliates of Fortress Investment Group LLC (“Fortress”) are also investors in doBank, and we do not think the Company should be managed as though it is a Fortress private fund and wedded to its investment strategies.

Second, the Company continues to trade at a discount to NAV, which we believe will continue unless the Company and the Board take a different strategic position. Our view is that the discount to NAV may be remedied through implementation of an open market buyback program that the Company’s shareholders authorised at the annual general meetings in 2016 and 2017. To date, the Company has not attempted to repurchase its stock in the open market. This authority may be utilised pro-actively to take advantage of the discount to NAV at which the Company trades while being accretive to NAV. We believe monetising doBank by selling to a strategic buyer will enable the Company to narrow this gap and also allow shareholders to realise the embedded gains in the Company’s position in doBank.

Third, we estimate that, as of 31 May 2018, the Company will be holding approximately €135 million, or approximately 27% of NAV, in uninvested cash, which we believe is excessive and should be distributed to shareholders while reserving for appropriate levels of working capital. While we recognise that the Company may from time to time want to hold cash for working capital purposes and to execute its investment strategy, we believe that the Company’s obligation to fund working capital alongside a regular dividend should be paid through the cash generation of the existing portfolio. Reserving cash commitments for working capital and future dividends is an inefficient use of cash and creates a drag on the Company’s performance. We highlight the Manager’s previous comments about its FINO investment that the deferred purchase price commitment over the next few years is to be funded via portfolio cash flows.

Fourth, we believe charging full management fees on doBank, an independently managed public company, is excessive because doBank’s “majority shareholder, Avio S.a.r.l. (a company jointly owned by Fortress and the Company), does not exercise management and coordination activities in respect of doBank,” according to doBank’s 2017 financial reports. The Manager currently charges a fee of 1.5% on NAV, excluding net corporate cash (the “Adjusted NAV”). The Company’s Adjusted NAV equaled €352 million, as of 31 March 2018, of which doBank was €230 million. doBank is a standalone business and, based on doBank’s own financial reports, the Company’s ownership of doBank shares does not require active management from the Manager.

Fifth, the Manager has affiliates on the Board and is also a shareholder of the Company. In light of the Manager’s multiple roles, including managing Fortress’ private funds which co-invest alongside the Company, there should be additional representation on the Board to serve the best interests of the Company and its shareholders, and to minimise potential conflicts, including with respect to the Company’s ownership of doBank. We invite the Manager to nominate two directors to the Board with input from EJF and other shareholders.

We believe that a discussion with the Board, the Manager, and the Company’s shareholders on these issues about maximising value for the Company’s shareholders would benefit all of the Company’s stakeholders.

Sincerely,

EJF Debt Opportunities Master Fund, L.P.

By: ____________________________________
Name: Emanuel J. Friedman
Title: Chief Executive Officer of EJF Capital LLC

About EJF Debt Opportunities Master Fund, L.P.

EJF Debt Opportunities Master Fund, L.P. is managed by EJF Capital LLC (“EJF Capital”), which is an SEC-registered1, employee-owned alternative asset management firm headquartered outside of Washington, D.C. EJF Capital manages approximately $6.4 billion2 of hedge, separately managed accounts, and private equity assets, as well as $2.6 billion2 of CDO assets through its affiliates. EJF Capital was founded in 2005 by Manny Friedman and Neal Wilson along with a small team of professionals from Friedman, Billings, Ramsey Group, Inc. EJF Capital currently employs approximately 80 professionals across three offices globally (Arlington, Virginia, London, England and Shanghai, China).

____________________________

1  

Registering with the US Securities and Exchange Commission does not imply any level of skill or training.

2 As of 30 April 2018. Firm assets under management includes $579.8 million of uncalled capital.

Contact information

EJF
Hammad Khan, +44 203 752 6771
hkhan@ejfcap.com
or
Hanbury Strategy
Kit Preston Bell, +44 7805 497 922
kit.prestonbell@hanburystrategy.com

Tietoja julkaisijasta

For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.

Tilaa tiedotteet sähköpostiisi

Haluatko tietää asioista ensimmäisten joukossa? Kun tilaat mediatiedotteemme, saat ne sähköpostiisi välittömästi julkaisuhetkellä. Tilauksen voit halutessasi perua milloin tahansa.

Lue lisää julkaisijalta Business Wire

Smithers Viscient announces the appointment of Ian Siragher to the position of Managing Director24.1.2019 13:30Tiedote

Smithers Viscient, a global contract research organization (CRO), today announced the appointment of Ian Siragher to the position of Managing Director. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190124005031/en/ Ian Siragher, Managing Director, Smithers Viscient Europe (Photo: Business Wire) Siragher will assume operational responsibility for the Smithers Viscient European site in Harrogate, UK. His experience includes high technology start-ups, running SME business, sales, marketing and regulated industry programs within the analytical, pharmaceutical and drug delivery industries. He brings a wealth of entrepreneurial experience with proven strengths in scientific knowledge, operational and strategic planning, coupled with a strong client focus. “We are delighted to welcome Ian to our business,” said Susan Shepherd, President, Smithers Viscient. “Ian is an excellent appointment for us; he is a proven operational leader

HCL Technologies Honors Humanitarian Leaders at the 2019 World Economic Forum in Davos24.1.2019 13:22Tiedote

HCL Technologies, a global technology company, today announced its Goodwill Champions Awards Night to honor humanitarian leaders from around the world. The event will take place on January 24th, 2019, at the HCL Pavilion in Davos and will celebrate these heroic organizations committed to pursuing distinct noble causes, primarily focused on global education, youth development, and women empowerment. This is the first year the awards have been presented, and HCL Technologies plans to issue them each year in a global forum. The award recipients are Katja Iversen, CEO of Women Deliver, which advocates for global investments in gender equality and health; Olajumoke Adekege, Founder of Young Business Agency, which provides employability skills training and recruitment services to young job seekers globally; Chiara Tiles, Founder of We Do it Together – which produces films, documentaries, TV, and other forms of media, uniquely dedicated to the empowerment of women; Baillie Aaron, Founder and

P&G Joins TerraCycle’s Loop – an Environmentally Friendly and Convenient E-Shopping Platform – With 11 Household Brands24.1.2019 13:00Tiedote

The Procter & Gamble Company (NYSE:PG) today announced the introduction of reusable, refillable packaging on some of its most popular products as part of a new effort that aims to change the world’s reliance on single use packaging and disposable waste. Additionally, new “collect and recycle” circular solutions that help eliminate waste were also introduced as part of a partnership with LoopTM, a circular e-commerce platform developed by international recycling leader TerraCycle. Many of P&G’s largest global brands, including PanteneTM, TideTM, CascadeTM and Oral-BTM will participate in this innovative platform later this year. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190124005087/en/ Pantene is introducing a unique bottle made with lightweight, durable aluminum for its shampoo and conditioner. (Photo: Business Wire) Loop is a first of its kind global packaging and shopping circular solution which aims to improve the e

RSM and DSI Agree to Cross-Border Insolvency Strategic Alliance24.1.2019 13:00Tiedote

Two well-known and respected firms in the global restructuring industry have formed a strategic alliance and international collaboration to further support their respective clients amid a growing wave of cross-border insolvency and international restructuring projects. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190123005735/en/ U.K.-based restructuring practice RSM Restructuring Advisory LLP ("RSM"), part of audit, tax and consulting firm RSM UK, and U.S.-based restructuring firm Development Specialists, Inc. (DSI), have announced an agreement to collaborate and augment each respective firm's services in dealing with transnational cases. "We're delighted to announce that we'll be collaborating with DSI on cross-border projects,” said Graham Bushby, a Partner and Head of Restructuring Advisory at RSM. “DSI is working on some significant transnational cases and brings a wealth of experience to the arena, which RSM can capa

Total Eren and NBT Secure the Financing for the First Phase of The 250 MW Syvash Wind Project in Ukraine from a Consortium Led by EBRD24.1.2019 11:00Tiedote

NBT AS (“NBT”), a utility-scale wind power developer based in Oslo, and Total Eren SA (“Total Eren”), a leading renewable energy Independent Power Producer (“IPP”) based in Paris, have signed definitive financing agreements for the first phase of a 250 MW wind project located in the Kherson region of Ukraine. The €155M financing agreement was signed at a special meeting of Ukraine’s National Investment Council in Davos. The project’s start of construction is imminent. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190124005105/en/ The onshore wind project, called Syvash wind farm (“Syvash”) has been developed by Norway-based NBT together with France-based Total Eren. At its full capacity, Syvash represents a €380 million total investment. Syvash will consist of 64 wind turbines and will be located on 1,300 hectares of land in the southern Kherson region of Ukraine. Once completed, it is expected to become the country’s large

STARMUS V, Host of The Stephen Hawking Medal, Hosts a Special Evening in Davos at WEF with Jean-Michel Jarre, Brian May and Luminary Scientific Panel24.1.2019 11:00Tiedote

This year, WEF was treated to a rare panel discussion bridging the fields of astronomy and music. Global CEOs and international media had the opportunity to hear from Dr. Brian May, Jean-Michel Jarre and Dr. Garik Israelian discuss STARMUS and the special connection between science and music. Flanked by a panel of renowned scientists, astronauts, and Nobel laureates, Jean-Michel Jarre introduced his groundbreaking tribute to the Apollo Missions for their 50th Anniversary. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190124005171/en/ WEF panel for STARMUS, Michel Mayor, Jean-Michel Jarre, Garik Israelian, and moderator Marco Larsen engage with the Davos audience. Photo by: Andres Eggenberger The esteemed panel included Swiss Astronaut Claude Nicollier, Garik Israelian, Brian May, and Michel Mayor. (Special thanks to the support from Kaspersky Labs and to the Stephen Hawking Medal for Science Communication sponsor, Omega.) T

Uutishuoneessa voit lukea tiedotteitamme ja muuta julkaisemaamme materiaalia. Löydät sieltä niin yhteyshenkilöidemme tiedot kuin vapaasti julkaistavissa olevia kuvia ja videoita. Uutishuoneessa voit nähdä myös sosiaalisen median sisältöjä. Kaikki STT Infossa julkaistu materiaali on vapaasti median käytettävissä.

Tutustu uutishuoneeseemme