NEW YORK, NY--(Marketwire - Jan 9, 2012) - Prospect Capital Corporation (
Together with prior cash flows, and excluding both escrow and earnout, the exit price translates for Energy Solutions into a 57% internal rate of return and 5.5 times cash on cash return on the Gas Solutions investment.
Energy Solutions, formerly known as Gas Solutions Holdings Inc., continues as a portfolio company of Prospect with other energy-related operations. Prospect continues to hold $40.5 million of debt against Energy Solutions, with such debt continuing to be serviced by Energy Solutions.
In the December 2011 quarter prior to the sale, which occurred in January 2012, Prospect received dividend income of $10.8 million from Gas Solutions, a record number and significantly greater than the $3.5 million received in the September 2011 quarter.
As a result of this record dividend income from Gas Solutions and the continuing performance of the rest of the Prospect portfolio, Prospect expects to exceed its prior net investment income guidance for the December 2011 quarter and to more than cover its distributions to Prospect shareholders in the December 2011 quarter.
In the current March 2012 quarter, Prospect expects to realize from Energy Solutions at least $12.1 million in interest, dividend, and fee investment income, with significant future expected income.
"The Gas Solutions exit represents another valuable realization in the Prospect Capital track record," said M. Grier Eliasek, President of Prospect. "We continue to work both on other potentially valuable realizations and on originating and closing new investments to put the capital realized to work in a diversified array of new opportunities. Having invested in more than $1 billion of new originations in calendar year 2011, and having significant current liquidity to fund new originations, we believe we have the resources in place to put significant new assets on the books in 2012."
"Our expertise in energy and long-term investment outlook helped drive our successful Gas Solutions investment over the past seven years," said Mark Hull, a Vice President of Prospect Capital Management. "We welcome the opportunity to review new investment opportunities in the energy sector and other industries, as we are now actively looking for attractive assets to replace Gas Solutions."
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a closed-end investment company that lends to and invests in private and microcap public businesses. Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
We have elected to be treated as a business development company under the Investment Company Act of 1940 ("1940 Act"). We are required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to us could have an adverse effect on us and our shareholders.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.