REG - Riverstone Credit - Investment and Quarterly Update

Riverstone Credit Opportunities IncomeAnnouncement

19/07/2024 18:00

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RNS Number : 1728X  Riverstone Credit Opps. Inc PLC  19 July 2024

19 July 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Riverstone Credit Opportunities Income

Investment and Quarterly Update

Riverstone Credit Opportunities Income ("RCOI" or the "Company"), the
LSE-listed energy infrastructure and energy-transition credit investor, is
pleased to announce a robust portfolio performance for the quarter ended 30
June 2024.

 

 Unaudited Net Asset Value

 

As at 30 June 2024, the unaudited net asset value per Ordinary Share,
including net revenue for the quarter, was $1.02(7) ($1.06: 31 March 2024),
reflecting stable performance by the unrealised portfolio.

 

Portfolio Summary and Key Performance Indicators

 

·    Portfolio of 100% floating rate, short duration, senior secured
loans, from investing in companies engaged in driving forward the energy
transition

·    40.6%(7) NAV total return(5) achieved since IPO in May 2019

·    36.1 cents in dividends paid since inception(6)

 

Harland & Wolff Update

 

The most significant move in the Company's NAV in the second quarter came from
a reduction in the value of its position in a loan made to Harland & Wolff
("H&W"). The Company and other funds managed by RCOI's investment manager,
Riverstone Investment Group LLC, (together with its affiliates "Riverstone")
are co-invested in a $115m loan to H&W of which RCOI's contribution is
$14.6m. The reduction in value of this loan in the second quarter was taken in
consultation with the Company's external valuation provider and reflects the
best estimate of the investment manager as to the fair market value of the
position. The principal reason for the reduction in value is that, as
announced today by H&W, the UK Department for Business and Trade has
notified H&W that HM Government will not be proceeding with the provision
of export development guarantee or loan facilities that they had long been
considering for H&W.

 

In connection with the notification from the UK Department for Business and
Trade that no loan or guarantee facilities will be provided to H&W, the
company has quickly expedited discussions with Riverstone, as manager of its
sole financial creditors, in order to secure additional debt facilities to
support the near-term working capital needs of H&W's business following
its recent significant revenue growth. In addition, the Company is engaging
Rothschild & Co to explore strategic options for H&W.

 

The additional funding is expected to be provided solely by credit funds
managed by Riverstone and to close in the next few days. The new capital
provided is expected to be classified as a super priority position to the
existing facility under of which the Company is a lender. As a condition to
the financing, the most recent $15 million upsize of the facility completed in
February 2024 (in which RCOI did not participate), is also expected to be
recharacterised as part of the new super priority facility. As announced by
H&W, the increase in debt facilities will be accompanied by a change in
personnel of H&W's senior management and the insertion of new
non-executive directors.

RCOI will not participate in the new super priority facility as it has now
entered into managed wind-down (and had previously already reached its
concentration limit in H&W). The Q2 NAV does not reflect the impact of
this new financing as it had not closed as of 30 June 2024.

The Board will continue closely to monitor developments regarding the
Company's investment in Harland & Wolff, in particular when considering
the appropriate timing for cash returns to Shareholders pursuant to its
wind-down strategy. In the meantime, the Company's cash balances are invested
in a money market and are yielding a healthy risk-free return.

Furthermore, given that a significant portion of the Company's previously
expected earnings for the second quarter was expected to come from a possible
H&W refinancing, the Board is evaluating the appropriate level of dividend
to pay for the second quarter and will provide further information in due
course.

 

Cumulative Portfolio Summary

Unrealised Portfolio 1  (#_edn1)

 Investment Name                         Subsector                Commitment Date  Cumulative Committed Capital ($mm)  Cumulative Invested Capital ($mm)  Gross Realised Capital ($mm)(1)  Gross Unrealised Value ($mm)  Gross Realised Capital & Unrealised Value ($mm)      % of Par as of 30 June 2024(2)  % of Par as of 31 Mar 2024(2)  30 June 2024 Gross MOIC  30 June 2024 Net MOIC
 Caliber Midstream(3)                    Infrastructure           Aug-19           4.0                                 4.0                                0.6                              0.4                           1.0                                                  34.46%                          33.52%                         0.26x                    0.07x
 Imperium3NY LLC                         Energy Transition        Apr-21           6.8                                 5.4                                6.7                              0.0                           6.7                                                  0.01(4)                         0.01(4)                        1.25x                    1.12x
 Blackbuck Resources LLC                 Infrastructure           Jun-21           11.5                                11.0                               6.4                              9.2                           15.7                                                 99.05%                          98.87%                         1.42x                    1.30x
 Harland & Wolff Group Holdings PLC      Infrastructure Services  Mar-22           14.6                                14.6                               2.0                              16.0                          18.0                                                 15.53                           18.60(4)                       1.24x                    1.15x
 Seawolf Water Resources                 Services                 Sept-22          9.0                                 9.0                                1.3                              11.9                          13.2                                                 11.85(4)                        12.09                          1.46x                    1.39x

 Hoover Circular Solutions               Infrastructure Services  Nov-22           13.7                                13.7                               2.5                              14.5                          17.0                                                 100.17%                         98.59%                         1.24x                    1.17x
 Max Midstream                           Infrastructure           Dec-22           5.0                                 5.0                                1.1                              5.1                           6.3                                                  102.60%                         102.09%                        1.25x                    1.19x
 Streamline Innovations Inc.             Infrastructure Services  Jun-23           9.9                                 5.4                                0.9                              5.6                           6.5                                                  100.54%                         99.29%                         1.21x                    1.16x
                                                                                   $74.5                               $68.1                              $21.5                            $62.7                         $84.4                                                                                                               1.24x                    1.15x

Realised Portfolio

 Investment Name              Subsector                     Commitment Date  Realisation Date  Cumulative Committed Capital ($mm)  Cumulative Invested Capital ($mm)  Gross Realised Capital ($mm)(1)  30 Jun 2024 Gross MOIC  30 Jun 2024 Net MOIC
 Rocky Creek Resources        Exploration & Production      Jun-19           Dec-19            6.0                                 4.3                                4.9                              1.15 x                  1.13 x
 CIG Logistics                Infrastructure Services       Jan-20           Jan-20            8.7                                 8.7                                8.9                              1.02 x                  1.02 x
 Mallard Exploration          Exploration & Production      Nov-19           Apr-20            13.8                                6.8                                7.7                              1.13 x                  1.12 x
 Market Based                 Multiple                      Aug-20           Nov-20            13.4                                13.4                               13.6                             1.01 x                  1.00 x
 Project Yellowstone          Infrastructure                Jun-19           Mar-21            5.8                                 5.8                                7.2                              1.23 x                  1.16 x
 Ascent Energy                Exploration & Production      Jun-19           Jun-21            13.3                                13.3                               16.1                             1.21 x                  1.13 x
 Pursuit Oil & Gas            Exploration & Production      Jul-19           Jun-21            12.3                                12.3                               15                               1.22 x                  1.14 x
 U.S. Shipping                Infrastructure Services       Feb-21           Aug-21            6.5                                 6.5                                7.3                              1.13 x                  1.11 x
 Aspen Power Partners         Infrastructure                Dec-20           Oct-21            6.9                                 3.4                                4.3                              1.27 x                  1.24 x
 Project Mariners             Infrastructure Services       Jul-19           Apr-22            13.2                                13.2                               17.6                             1.33 x                  1.22 x
 Roaring Fork Midstream       Infrastructure                Mar-21           Jun-22            5.9                                 5.9                                6.9                              1.16 x                  1.11 x
 FS Crude, LLC                Infrastructure                Mar-20           Sept-22           13.7                                13.7                               16.9                             1.23 x                  1.13 x
 EPIC Propane Pipeline, LP    Infrastructure                Dec-19           Sept-22           14.8                                14.8                               19.6                             1.32 x                  1.21 x
 Circulus Holdings, PBLLC     Infrastructure                Aug-21           Oct-22            12.3                                12.3                               14.0                             1.14 x                  1.10 x
 Hoover Circular Solutions    Infrastructure Services       Oct-20           Nov-22            15.4                                15.4                               17.0                             1.10 x                  1.01 x
 Streamline Innovations Inc.  Infrastructure Services       Nov-21           Jun-23            13.8                                6.9                                8.9                              1.29 x                  1.22 x
 Clean Energy Fuels Corp      Energy Transition             Dec-22           Dec-23            13.9                                13.9                               15.7                             1.14 x                  1.10 x
 EPIC Propane Pipeline, LP    Infrastructure                Sept -22         Apr-24            13.9                                13.9                               17.2                             1.24x                   1.18x
                                                                                               $203.7                              $184.5                             $218.7                           1.19x                   1.12x

The Gross Realised Capital column includes interest, fee income, and principal
received. The Gross Unrealised Value column includes the amortization of OID,
accrued interest, fees and any unrealised change in the value of the
investment.

For Riverstone Credit Opportunities Income Plc:

Adam Weiss

+1 212 271 2953

 

 J.P. Morgan Cazenove (Corporate Broker)   +44 (0)20 7742 4000
 William Simmonds
 Jérémie Birnbaum
 James Bouverat (Sales)

 
Media Contacts:
Buchanan
 Helen Tarbet    Tel: +44 (0) 20 7466 5109
 Henry Wilson    Tel: +44 (0) 20 7466 5111
 Verity Parker   Tel: +44 (0) 20 7466 5197
                 Email:
                 rcoi@buchanan.uk.com (mailto:rcoi@buchanan.uk.com)

 

About Riverstone Credit Opportunities Income Plc:

 

RCOI lends to companies that build and operate the infrastructure used to
generate, transport, store and distribute both renewable and conventional
sources of energy, and companies that provide services to that infrastructure.
RCOI also lends to companies seeking to facilitate the energy transition by
decarbonizing the energy, industrial and agricultural sectors, building
sustainable infrastructure and reducing or sequestering carbon emissions. The
Company seeks to ensure that its investments are having a positive impact on
climate change by structuring each deal as either a green loan or a
sustainability-linked loan, documented using industry best practices.

 

As previously announced, on January 2, Riverstone Holdings LLC, and their
affiliate Riverstone Investment Group (collectively, "Riverstone") entered
into a sub management agreement for RCOI with Breakwall Capital LP.
Breakwall is an independent asset manager regulated by the SEC as a Registered
Investment Advisor. It is owned and operated by the former members of the
Riverstone Credit Partners team.

 

For further details, see https://www.riverstonecoi.com/
(https://www.riverstonecoi.com/) .

 

Neither the contents of RCOI's website nor the contents of any website
accessible from hyperlinks on the websites (or any other website) is
incorporated into, or forms part of, this announcement.

 

(#_ednref1) 1 Gross realised capital is total gross income realised on
invested capital.

(2) Includes fair market value of equity and rights where applicable as a
percentage of par.

(3) Includes Caliber MFC LLC equity, Caliber Midstream Term Loan & Priming
Facility.

(4) Reflects the total fair market value in millions.

(5) NAV total return equals cumulative paid dividend cents per share and NAV
per share as of 30 June 2024 divided by the opening capital net of share
issuance costs as of 28 May 2019.

(6) Reflects cumulative dividend cents per share declared as of 31 March 2024
and paid as of 30 June 2024.

(7) Estimated as of 30 June 2024.

( )

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