Medley Capital Corporation Subject to Monthly Expense Support, Houlihan Lokey Commenced Strategic Review Process
June 15 2020 - 7:30AM
Medley Capital Corporation (NYSE: MCC) (TASE: MCC) (the “Company”)
announced today that, on June 12, 2020, the board of directors of
the Company (the “Board”), including its special committee (the
“Special Committee”), has approved an expense support agreement
(the “Expense Support Agreement”) under which MCC Advisors
LLC and Medley LLC agreed (jointly and severally) to cap the
management fee and all of the Company’s other operating expenses
(except interest expenses, certain extraordinary strategic
transaction expenses, and other expenses approved by the Special
Committee at $667,000 per month (the “Cap”). The Cap is
expected to result in a material reduction in the Company’s
expenses. Under the Expense Support Agreement, the Cap will
be in effect from June 1, 2020 through September 30, 2020. In
connection with the Expense Support Agreement, the Board, including
all of its independent directors extended the term of the
investment management agreement and the administration agreement
with MCC Advisors LLC through the quarter ended September 30, 2020.
In addition, the Special Committee continues to
explore strategic alternatives seeking to maximize shareholder
value. Houlihan Lokey, the Special Committee’s financial advisor,
has commenced a strategic review process, which is ongoing. "The
Expense Support Agreement is a near-term valuable step in making
the Company more efficient through lowering its cost structure,"
said David Lorber, Chair of the Special Committee.
ABOUT MEDLEY CAPITAL
CORPORATION
Medley Capital Corporation is a closed-end,
externally managed business development company (“BDC”) that has
common stock which trades on the New York Stock
Exchange (NYSE: MCC) and the Tel Aviv Stock Exchange (TASE:
MCC) and has outstanding bonds which trade on the New York
Stock Exchange under the symbols (NYSE: MCV) and (NYSE:
MCX). Medley Capital Corporation's investment objective
is to generate current income and capital appreciation by lending
to privately-held middle market companies, primarily through
directly originated transactions, to help these companies expand
their businesses, refinance and make acquisitions. Our portfolio
generally consists of senior secured first lien loans and senior
secured second lien loans. Medley Capital Corporation is
externally managed by MCC Advisors LLC, which is an investment
adviser registered under the Investment Advisers Act of 1940, as
amended. For additional information, please visit Medley
Capital Corporation at www.medleycapitalcorp.com.
ABOUT MCC ADVISORS LLC
MCC Advisors LLC is a subsidiary of Medley Management
Inc. (NYSE: MDLY, “Medley”). Medley is an alternative asset
management firm offering yield solutions to retail and
institutional investors. Medley’s national direct origination
franchise is a premier provider of capital to the middle market in
the U.S. Medley has $3.8 billion of assets
under management in two BDCs, Medley Capital
Corporation (NYSE: MCC) (TASE: MCC) and Sierra Income
Corporation, and several private investment vehicles. Over the past
18 years, we have provided capital to over 400 companies across 35
industries in North America.1 For additional information,
please visit Medley Management
Inc. at www.mdly.com.
Medley LLC, the operating company of Medley Management
Inc., has outstanding bonds which trade on the New York Stock
Exchange under the symbols (NYSE:MDLX) and (NYSE:MDLQ).
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking”
statements, including statements regarding the impact of the
Expense Support Agreement and any potential exploration of
strategic alternatives by the Special Committee. Such
forward-looking statements reflect current views with respect to
future events and financial performance, and the Company may make
related oral forward-looking statements on or following the date
hereof. Statements that include the words “should,” “would,”
“expect,” “intend,” “plan,” “believe,” “project,” “anticipate,”
“seek,” “will,” and similar statements of a future or
forward-looking nature identify forward-looking statements in this
material or similar oral statements for purposes of
the U.S. federal securities laws or otherwise. Because
forward-looking statements, such as the impact of the Expense
Support Agreement and the possibility that the Company may explore
strategic alternatives, include risks and uncertainties, actual
results may differ materially from those expressed or implied.
Important factors that could cause actual results to differ
materially from the expectations reflected in the forward-looking
statements include, but are not limited to: those discussed in the
Company’s filings with the Securities and Exchange Commission,
the uncertainty regarding actual level of expenses the
Company incurs which may not be materially lower than current
expenses due to a variety of factors such as unexpected expenses
not covered by the Expense Support Agreement; whether the Company
will pursue another strategic transaction; the timing, benefits and
outcome of any exploration of strategic alternatives by the
Company; potential disruptions in the Company’s business and stock
price as a result of our exploration of any strategic alternatives;
the ability to realize anticipated efficiencies, or strategic or
financial benefits; potential transaction costs and risks; the risk
that any exploration of strategic alternatives may have an adverse
effect on our existing business arrangements or relationships,
including our ability to retain or hire key personnel; and
uncertainties associated with the impact from the COVID-19
pandemic, including its impact on the global
and U.S. capital markets and the global
and U.S. economy, the length and duration of the COVID-19
outbreak in the United States as well as worldwide and
the magnitude of the economic impact of that outbreak, the effect
of the COVID-19 pandemic on the Company’s business prospects and
the operational and financial performance of its portfolio
companies, including its ability and their ability to achieve their
respective objectives, and the effects of the disruptions caused by
the COVID-19 pandemic on our ability to continue to effectively
manage our business.
The foregoing review of important factors should
not be construed as exhaustive and should be read in conjunction
with the other cautionary statements that are included in the “Risk
Factors” and other sections of the Company’s most recent Annual
Report on Form 10-K and most recent Quarterly Report on Form 10-Q.
The forward-looking statements in this press release represent the
Company’s views as of the date of hereof. The Company anticipates
that subsequent events and developments will cause its views to
change. However, while the Company may elect to update these
forward-looking statements at some point in the future, the Company
does not have any current intention of doing so except to the
extent required by applicable law. You should, therefore, not rely
on these forward-looking statements as representing the Company’s
views as of any date subsequent to the date of this material.
SOURCE: Medley Capital Corporation
Investor Relations Contact:Sam AndersonHead of Capital Markets
& Risk ManagementMedley Management Inc.212-759-0777
Media Contact:Jonathan Gasthalter/Nathaniel GarnickGasthalter
& Co. LP212-257-4170
1 Medley Management Inc. is the parent company of Medley LLC and
several registered investment advisors (collectively, “Medley”).
Assets under management refers to assets of Medley’s funds, which
represents the sum of the net asset value of such funds, the drawn
and undrawn debt (at the fund level, including amounts subject to
restrictions) and uncalled committed capital (including commitments
to funds that have yet to commence their investment periods).
Assets under management are $3.8 billion as of March 31, 2020.
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