Business Wire

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

Del

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

Om Business Wire

Business Wire
Business Wire
24 Martin Lane
EC4R 0DR London

+44 20 7626 1982http://www.businesswire.co.uk

(c) 2018 Business Wire, Inc., All rights reserved.

Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.

Følg saker fra Business Wire

Registrer deg med din epostadresse under for å få de nyeste sakene fra Business Wire på epost fortløpende. Du kan melde deg av når som helst.

Siste saker fra Business Wire

IFF Recognized by SAM’s 2019 “Industry Mover” Sustainability Award15.2.2019 21:15:00Pressemelding

Regulatory News: International Flavors & Fragrances Inc. (NYSE: IFF) (Euronext Paris: IFF) (TASE: IFF), was recognized for its sustainability efforts with the 2019 “Industry Mover” award from SAM, a subsidiary of RobecoSAM which specializes in providing environmental, social and governance (ESG) data, benchmarks and ratings. The recognition acknowledges the Company’s top-scoring performance in economic, social and environmental categories. “We are thrilled to receive this award from SAM,” said Andreas Fibig, IFF Chairman & CEO. “Our sustainability efforts are not only a key enabler of our overall strategy, but also a true passion here at IFF -- and we place it at the forefront of everything we do. It is deeply gratifying to have our work and our people recognized for doing the right thing for the planet.” SAM’s 2019 scoring is based on its 2018 Corporate Sustainability Assessment. Using a weighted methodology, SAM evaluates companies for criteria such as: codes of business conduct, ope

SFL: strong financial position and results in 2018, consolidating the Group’s position as a prime player15.2.2019 18:01:00Pressemelding

Regulatory News: The financial statements for the year ended 31 December 2018 were approved by the Board of Directors of Société Foncière Lyonnaise (Paris:FLY) on 15 February 2019 at a meeting chaired by Juan José Brugera. 2018 business indicators were very robust, with further underlying growth in rental income and historically high EPRA earnings. The portfolio's appraisal value and the Company's net asset value also continued to grow, attesting to SFL’s excellent positioning. The auditors have completed their audit of the annual financial information and are in the process of issuing their report. Consolidated data (€ millions) 2018 2017 Change Rental income 193.5 195.8 -1.2% Adjusted operating profit* 162.1 164.1 -1.2% Attributable net profit 351.6 685.3 - EPRA earnings 106.7 102.4 +4.1% * Operating profit before disposal gains and losses and fair value adjustments 31/12/2018 31/12/2017 Change Attributable equity 4,010 3,763 +6.6% Consolidated portfolio value excluding transfer cost

5 Happening Cultural Destinations to Visit in 201915.2.2019 10:11:00Pressemelding

Hong Kong There’s never really a sleepy year to visit Hong Kong, but 2019 is particularly ripe for visitors. Spearheaded by the dynamic entrepreneur Adrian Cheng of K11 and New World Development, the rejuvenation of Tsim Sha Tsui harbourfront is just the starting point. The city’s iconic harbourside walkway, Avenue of Stars, has just received a much-awaited makeover that’s the brainchild of Cheng and visually conceived by James Corner, the landscape architect responsible for the High Line in New York. It sees the addition of design-driven rest areas, kiosks featuring homegrown brands, hand prints from Asian film stars and interactive digital elements. Featuring Hong Kong’s first wave energy demonstrator that produces electricity for the Avenue, the place is turned into one of the most sustainable promenades in Hong Kong. This is just one part of Cheng and his company’s grander urban revitalisation plan, Victoria Dockside, a new art and design district which will fully open in the third

ISAE-SUPAERO Launches a New MOOC about Flight Mechanics15.2.2019 09:36:00Pressemelding

"ABC of Flight Mechanics: How Do Planes Fly?": a MOOC dedicated to flight mechanics. The notion of flight often defies our human terrestrial instincts. How does an airplane fly? How can a pilot maintain control? How high in the sky can an aircraft climb? How does a fighter pilot fly while spinning? This online course (available in English) will cover many topics, such as atmospheric physics and Newton's laws applied to aircraft, as well as propulsion forces and longitudinal stability the question of traction. The MOOC "ABC of Flight Mechanics" is aimed at general public with a specific level of scientific knowledge. Nevertheless, various levels of learning are available, thus it allows all students to take the course without needing to plenty understand the mathematical principles. Undergraduate students in aerospace engineering, trainees as well as novice and experienced pilots, journalists and professionals in the aeronautics domain (business, engineering, marketing, communications,

REPLY: Red Reply Wins the Oracle “Partner of the Year Autonomous” Award15.2.2019 09:30:00Pressemelding

Red Reply, the Reply group company that specialises in the Oracle Cloud IaaS and PaaS platform has been named as Oracle “Partner of the Year: Autonomous.” The award recognises Red Reply for its work as an Oracle Cloud Managed Service Provider Partner in developing highly innovative projects using the Oracle Autonomous Database technology. Red Reply has launched a project aimed at re-engineering the Policy Enterprise DataWarehouse of Verti Assicurazioni, company operating in the online insurance sector, using the Oracle Cloud Autonomous DataWarehouse service. The Autonomous DataWarehouse is a cloud-based database that uses machine learning to eliminate manual labour in operations such as tuning, security, backups, updates and other routine activities. This selected Oracle solution is the only one of its kind capable of addressing aspects such as security, performance and high availability of data, using automatic update and tuning mechanisms, while maximising the protection of data in l

Posiflex showcases new Interactive Self-Service Kiosks and IoT Retail Product Innovations at EuroCIS 201915.2.2019 08:00:00Pressemelding

The Posiflex Group — a synergy of world-leading POS, kiosk, and industrial computing technologies — will introduce its full product portfolio and latest innovations at EuroCIS, the leading trade fair for retail technology, from February 19th – 21st in Düsseldorf. With a product strategy focus on serviced IoT, the Posiflex Group will be displaying smart and connected retail solutions with fully-integrated middleware, RMS (Remote Monitoring System) and hardware. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190215005008/en/ Posiflex at EuroCIS Hall 9 / C42 (Graphic: Business Wire) “I am excited to introduce the Posiflex Group portfolio to the European market,” says Hans Peter Nüdling, the newly appointed Chief Strategy Officer for the Posiflex Group. “The Posiflex Group references the collective brands of the corporation, including Posiflex, Portwell and KIOSK Information Systems (KIOSK) – all under one corporate umbrella. As