ALTERNATIVE lending fund RDL Realisation is set to announce a special dividend after receiving full repayment of its vehicle service contract (VSC) loans.
The $27.9m (£22.9m) refinancing deal is part of the ongoing wind-down of RDL’s portfolio.
Read more: Numis analysts query value of RDL assets
“The amount and timing of the special dividend will be determined with regard to the obligations of the company and the maintenance of sufficient reserves,” RDL said in a stock exchange announcement on Wednesday.
“The company will also look to structure its dividend payments to maintain investment trust status for so long as it remains listed. Further announcements regarding dividend payments will be made in due course.”
Although RDL has not yet revealed the value of the dividend, analysts at Numis have estimated that the value of the repayment is equivalent to 134p (or $1.63) per share. This represents approximately 20 per cent of net assets as of 31 December.
However, Numis also warned that investors should also expect a write-back to the NAV, valued at around 25p per share.
“It is positive for shareholders to see a further repayment which is likely to see a return of capital, which will likely be significant compared to the current market cap of £76m,” said Numis. “However, timing of further returns of capital remains uncertain. In addition, there should be a write back to the NAV, although the exact value is yet to be quantified.
“At the 31 December the par value of loans to the VSC platform was $48.5m, which after impairment had a fair value of $39.8m. Based on the proportional impairment and the $27.9m repayment, we calculate it would imply a write back of c.$5m (25p per share).”
RDL still has a $4.5m enterprise value loan outstanding to a related entity of the VSC platform. This loan was due in May 2019, and the company continues to receive monthly interest. The fund said it is in “active discussions” to restructure this loan in the near future.