TROUBLED investment trust Ranger Direct Lending (RDL) has reported a further decline in its net asset value (NAV) amid an ongoing legal dispute over its Princeton holding.
In the first six months of 2018, RDL’s NAV fell by 3.7 per cent in US dollar terms on the back of deteriorating performance at a number of platforms, persistent uncertainty over its Princeton investment and escalating legal and advisory costs.
RDL continued to pay dividends, but they dropped from 55.4p for the half year to 30 June 2017 to 14.28p for the current half year, despite sterling depreciating against the US dollar.
The company has been embroiled in a lengthy dispute over Princeton’s exposure to bankrupt lender Argon.
“It is extremely disappointing that after more than a year of litigation and the expenditure of significant sums that the company still lacks control and detailed information on the investments underlying the company’s holding in the Princeton fund,” RDL said. “Notwithstanding that, we are now determined to step up our efforts and will vigorously pursue all legal and commercial means at our disposal to achieve maximum efficient recovery for our shareholders.”
In August, an arbitration panel awarded RDL net damages totalling $30.7m (£23.5m), plus pre-judgement interest accruing from 30 November 2016, but it needs the go-ahead from the bankruptcy court to be able to enforce the award.
RDL, which announced it would be closing down in June, said the board plans to commence capital returns in the coming months and aims to exit the majority of its portfolio before the end of the year.
Numis, the stockbroker, said although this will provide some encouragement for investors, it remains to be seen whether this can be achieved at carrying value, while details of the exact timings are limited.
“In addition, there remains significant uncertainty around the timing and value of any recovery from Princeton, which represents c. 14 per cent of net assets,” Numis said.
“Our newly intensified efforts on Princeton may not yield immediate results, but we remain confident in the merits of our case,” RDL said.