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Crown Capital Partners Announces Loan Repayments

CALGARY, October 2, 2020 – Crown Capital Partners Inc. (“Crown”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced it has received proceeds from two loans: 

  • Crown received full repayment by CCI Wireless (“CCI”) of a $5.5 million term loan from Crown Partners Fund, following the recent acquisition of CCI by Xplornet Communications.  CCI prepaid this loan in full, including principal, interest, fees and other payments. The CCI loan was held by Crown Partners Fund, an investment fund managed by Crown and in which Crown holds an effective interest of 39%. The realized Gross IRR on Crown Partners Fund’s aggregate investment in CCI was 17.2%.
  • Crown also received $7.0 million from Mill Street & Co. Inc. (“Mill Street”). In May 2018, Crown completed a $10 million, 10-year loan with Mill Street through Crown Private Credit Fund, a wholly owned subsidiary of Crown. As previously disclosed, Crown issued a formal demand for payment in the first quarter of 2020. Crown expects to realize further proceeds from Mill Street in late 2020 and early 2021.

“We congratulate the CCI team on this transaction and wish them continued success. While it was a short-term loan, this was another successful investment for the investors in Crown Partners Fund,” said Chris Johnson, President and CEO of Crown. “Consistent with our plan, the proceeds from these two realizations will be used to pursue strategic opportunities and rationalize our capital structure.”

About Crown Capital Partners (TSX:CRWN) 

Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co-invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

FORWARD-LOOKING STATEMENTS

This news release contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown’s periodic filings with Canadian securities regulators. See Crown’s most recent annual information form for a detailed discussion of the risk factors affecting Crown. In addition, Crown’s dividend policy will be reviewed from time to time in the context of the Corporation’s earnings, financial requirements for its operations, and other relevant factors and the declaration of a dividend will always be at the discretion of the board of directors of the Corporation. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

For further information, please contact:

Craig Armitage
Investor Relations
[email protected]
(416) 347-8954

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Crown Capital Partners Announces Loan Repayments2020-10-02T20:30:14+00:00

Crown Capital Partners Expands Network Services Platform with Acquisition of Galaxy Broadband Communications

Crown’s second acquisition in telecom provides scale, cross-selling opportunities, and expanded capabilities to target growing need for broadband connectivity to remote locations

Galaxy gains access to additional capital and resources to accelerate growth 

CALGARY, September 21, 2020 – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced it has acquired privately-held Galaxy Broadband Communications Inc. (“Galaxy”), an Ontario-based satellite service company that provides telecommunications services to enterprise customers across Canada. 

For almost three decades, Galaxy has provided reliable and innovative communications to enterprises with remote locations where limited or no connectivity exists. The company utilizes third-party satellite spectrum, combined with its proprietary networks and infrastructure, to deliver remote data communications, VoIP, and internet access to customers across a range of industries, including resource-based projects, government entities, emergency responders, and infrastructure projects. In addition, Galaxy offers a range of value-added services and solutions such as 24/7 managed service of IT networks, including security, monitoring, and reporting, as well as network design and consulting, commercial installation and maintenance. Rick Hodgkinson, Founder, President & CEO of Galaxy, is one of Canada’s satellite pioneers and was one of the very first to introduce satellite communications technologies for voice, data, and entertainment to the resource industry beginning in Northern Alberta in 1981. 

“We’re excited to add the Galaxy team to Crown’s Network Services platform, which we believe has significant long-term opportunity driven by the need to better connect private enterprise customers, government entities and communities in underserved areas,” said Chris Johnson, President & CEO of Crown. “Under Rick’s leadership, Galaxy has established an excellent reputation in the marketplace, as well as a solid base of recurring revenue primarily from large enterprise customers. When combined with our existing WireIE operations, we move forward with additional scale and deeper technology and go-to-market capabilities. COVID-19 has heightened the need for better connectivity in remote communities – for everything from medical services to education – and we have an even stronger platform with which to address this market opportunity.”   

“This is a great milestone for our team, customers, and partners in Galaxy’s 28-year journey,” added Rick Hodgkinson, Founder, President & CEO of Galaxy. “By partnering with Crown, we will benefit from improved access to capital to accelerate growth and capitalize on new opportunities, while continuing to provide our customers with the most reliable, innovative and cost-effective solutions to connect them wherever they go.” 

The acquisition of Galaxy represents Crown’s second transaction in the Network Services industry following the 2019 acquisition of WireIE, which operates as a wholly-owned subsidiary of Crown. This industry offers both high-quality, recurring revenue and strong growth prospects. As Crown’s investments in Network Services grow, the Corporation plans to raise commitments from third-party investors to fund future asset growth and capitalize on the market opportunity.

The acquisition price was $7.5 million, including cash, assumed debt and performance-based earnout payments. In its most recent fiscal year ended April 30, 2020, Galaxy had revenue of approximately $11.5 million. 

Toronto-based Sapient Capital Partners acted as exclusive financial advisor to Galaxy.

About Crown Capital Partners (TSX:CRWN) 

Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co- invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

FORWARD-LOOKING STATEMENTS

This news release contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown’s periodic filings with Canadian securities regulators. See Crown’s most recent annual information form for a detailed discussion of the risk factors affecting Crown. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

For further information, please contact:

Craig Armitage
Investor Relations
[email protected]

(416) 347-8954

 

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Crown Capital Partners Expands Network Services Platform with Acquisition of Galaxy Broadband Communications2020-09-22T17:06:31+00:00

Crown Capital Partners Announces Q2 2020 Financial Results

CALGARY, August 12, 2020 – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced its financial results for the second quarter ended June 30, 2020. Crown’s complete financial statements and management’s discussion and analysis for Q2 2020 are available on SEDAR at www.sedar.com.

Q2 2020 Financial & Operating Highlights

  • Total revenue increased 21% to $13.3 million from $11.0 million in Q2 2019, due mainly to increased interest revenue and the addition of the network services business.
  • Interest revenue was $7.2 million, up 26% compared with $5.7 million in Q2 2019, reflecting the growth of Crown Partners Fund and initial contributions from Crown Power Fund, offset by lower interest revenue from on balance sheet investments.
  • Adjusted Funds from Operations1 increased to $3.6 million, up 81% from $2.0 million in Q2 2019.
  • Net loss of $(1.6) million (Q2 2019 – net income of $2.3 million), or $(0.17) per common share (basic) (Q2 2019 – net income of $0.23 per share). The net loss for the current period mainly reflects a provision for credit losses of $3.9 million that is primarily in respect of the loan in PenEquity Realty Corp.
  • Total assets increased to $324.9 million at quarter-end, compared with $299.7 million at December 31, 2019, due mainly to net additions to each of investments and distributed power equipment under development.
  • Total equity as at June 30, 2020 was $93.0 million, or $9.90 per basic share.
  • Crown Power Fund established a new relationship with a seventh operating partner which is primarily focused on providing distributed power solutions to commercial end users in Eastern Canada.
  • Crown Partners Fund advanced an additional $5.0 million to CareRx (formerly Centric Health Corporation) under its $30.0 million loan commitment, increasing this loan to $27.0 million.
  • Crown Partners Fund received early repayment by Touchstone Exploration of a $20.0 million special situations loan.
  • Under its Normal Course Issuer Bid, Crown acquired and cancelled 38,698 shares in the second quarter.

“Consistent with the strategic priorities we outlined in Q1 2020, our team is working diligently to expand our investment platforms – Alternative Corporate Financing, Distributed Power and Network Services – while we are beginning the difficult but necessary work to reposition our balance sheet and transition to a capital-light business,” said Chris Johnson, President and CEO of Crown. “Our focus on downside protection has served us well during past downturns and, now five months into the COVID-19 pandemic, our investment portfolio is currently in stable condition overall. Although the broader economic outlook appears challenging, we believe we are likely entering a strong cycle for our key lines of business, and we plan to expand our fund management business to capitalize on this expected growth.”

Update on Operations

Alternative Corporate Financing Investments

At June 30, 2020, our Alternative Corporate Financing investments stood at $264.6 million, including Special Situations Financing investments of $227.5 million and Long-Term Financing investments of $37.1 million. Our Special Situations Financing investments are managed through Crown Partners Fund, in which Crown holds an approximate 39% interest.

We continue to actively monitor the impact of the COVID-19 pandemic and the related economic impacts on the health of our portfolio companies. We expect all our portfolio companies will be affected to some degree.  The duration and impact of this pandemic are unknown at this time, and the longer the situation continues, the more uncertainty there will be regarding the business, operations, financial condition and/or underlying security value of our borrowers. We presently believe the impacts of the current situation will not result in the failure of any of our borrowers, although we will likely have to financially restructure a small number of our portfolio companies to address over-leveraged balance sheets.

Consistent with our plan to increase capital efficiency, we expect to reduce our ownership position in Crown Partners Fund toward a target of 20% or less, from 39% currently. In addition, we are in the process of realization, at least in part, of our two Long-term Financing investments. The proceeds from realizations will be used to pursue strategic opportunities and rationalize our capital structure.

Distributed Power Investments

In our distributed power business, our priorities for 2020 include building assets in the Crown Power Fund and securing additional third-party funding commitments to finance additional projects. We presently see only minimal financial impacts of the COVID-19 pandemic on the financial performance of our power generation assets or opportunities. The pipeline of potential transactions, including prospective projects already in the planning stage, is growing and now stands at approximately $200 million, and we continue to build our base of operating partners, with seven developers now involved. In June 2020, Crown Power Fund established a relationship with, and partial ownership in, an additional third-party operating partner focused on Eastern Canada.

Crown is pursuing additional capital from limited partner investors in both our special situations and distributed power funds in the near term.

Q2 2020 Financial Results Summary

1 Adjusted Funds from Operations is not a measure of financial performance (nor does it have a standardized meaning) under IFRS. In evaluating this measure, investors should consider that the methodology applied in calculating these measures might differ among companies and analysts. The Corporation has provided a reconciliation of loss before income taxes to Adjusted Funds from Operations in this news release. We believe that Adjusted Funds from Operations is a useful supplemental measure in the context of Crown’s specialty finance focus to assist investors in assessing the cash anticipated to be generated by Crown’s business, including cash received in relation to its various revenue streams, that is attributable to Shareholders. Adjusted Funds from Operations should not be considered as the sole measure of Crown’s performance and should not be considered in isolation from, or as a substitute for, analysis of the Corporation’s financial statements.

Conference Call & Webcast

Crown will host a conference call and webcast (with slide presentation) to discuss its Q2 2020 financial results at 8:30 a.m. EDT on August 12, 2020. The call will be hosted by Chris Johnson, President & CEO, and Michael Overvelde, CFO. To participate in the call, dial (416) 764-8659 or (888) 664-6392 using the conference ID 12863040. The webcast can be accessed at www.crowncapital.ca under Investor Relations or https://bit.ly/2Dg1cwy. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.

About Crown Capital Partners (TSX:CRWN)
Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co-invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

FORWARD-LOOKING STATEMENTS

This news release contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management’s beliefs, expectations or intentions regarding the alternative financial market and the general economy, transaction pipeline, Crown’s business plans and strategy, including anticipated capital deployments and the timing thereof, and Crown’s future earnings. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown’s periodic filings with Canadian securities regulators. See Crown’s most recent annual information form for a detailed discussion of the risk factors affecting Crown. In addition, Crown’s dividend policy will be reviewed from time to time in the context of the Corporation’s earnings, financial requirements for its operations, and other relevant factors and the declaration of a dividend will always be at the discretion of the board of directors of the Corporation. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

For further information, please contact:

Craig Armitage
Investor Relations
[email protected]

(416) 347-8954

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Crown Capital Partners Announces Q2 2020 Financial Results2020-08-12T13:42:23+00:00

Notice of Crown Capital Q2 2020 Results Conference Call & Investor Update

CALGARY, August 4, 2020 – Crown Capital Partners Inc. (TSX: CRWN), which provides growth capital to successful mid-market companies, today announced it will host a conference call on August 12, 2020 at 8:30 a.m. EDT to discuss its 2020 second quarter results and provide an update on operations and strategy. The event will be hosted by Chris Johnson, President and Chief Executive Officer, and Michael Overvelde, Chief Financial Officer. The live webcast will include a slide presentation.

Q2 2020 CONFERENCE CALL & WEBCAST

DATE: Wednesday, August 12, 2020
TIME: 8:30 a.m. EDT
DIAL IN NUMBER: (416) 764-8659 or (888) 664-6392
CONFERENCE ID: 12863040
REPLAY: (416) 764-8677 or (888) 390-0541 Available until midnight (EST) August 19, 2020
WEBCAST: The audio webcast and accompanying slide presentation can be accessed at www.crowncapital.ca under Investor Relations or at this link.

About Crown Capital Partners (TSX:CRWN)

Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co- invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

For further information, please contact:

Craig Armitage
Investor Relations
[email protected]
(416) 347-8954

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Notice of Crown Capital Q2 2020 Results Conference Call & Investor Update2020-08-05T13:45:26+00:00

Crown Capital Partners Appoints Steven Sharpe to Board of Directors

CALGARY, July 17, 2020 – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), which provides growth capital to successful mid-market companies, today announced the appointment of Steven Sharpe to its Board of Directors.

Mr. Sharpe has extensive senior leadership and public company governance experience across a range of industries. He is currently Managing Director of The EmBeSa Corporation, a private consultancy and a director of Dundee Corporation and Essential Energy Services Ltd. Most recently, he was Chairman of Madalena Energy Inc. and its Interim CEO. Mr. Sharpe was also Chairman and CEO of the Prime Restaurants Royalty Income Fund (subsequently Chairman of Prime Restaurants Inc.) until its acquisition by Fairfax Financial. Previously, Mr. Sharpe was Chairman and Interim CEO of Longview Oil Corp.; Chairman of Advantage Oil & Gas Ltd.; a director and Chair of the Special Committee of Renegade Petroleum Ltd.; and Chief Executive Officer and a director of C.A. Bancorp Inc.

From 2002 to 2007, Mr. Sharpe was a co-founder and co-Managing Partner of Blair Franklin, a Toronto-based investment bank. A lawyer by training, Mr. Sharpe graduated from Osgoode Hall Law School and practiced for close to 20 years at Torys and at Davies, Ward & Beck.

“We welcome Steven to Crown’s Board of Directors,” said Alan Rowe, Chairman of Crown. “Steven has deep governance and operational experience and a broad skill-set that will serve us well as we reposition Crown’s balance sheet and continue to build out the Crown Capital platform.”

About Crown Capital Partners (TSX:CRWN)

Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and co- invests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

FORWARD-LOOKING STATEMENTS

This news release contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown’s periodic filings with Canadian securities regulators. See Crown’s most recent annual information form for a detailed discussion of the risk factors affecting Crown. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.


For further information, please contact:

Craig Armitage
Investor Relations
[email protected]
(416) 347-8954

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Crown Capital Partners Appoints Steven Sharpe to Board of Directors2020-07-18T17:48:45+00:00

Crown Capital Partners Announces Repayment of Loan by Touchstone Exploration

Crown Capital Partners Announces Repayment of Loan by Touchstone Exploration

CALGARY, June 15, 2020 – Crown Capital Partners Inc. (“Crown”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced the full repayment by Touchstone Exploration Inc. (“Touchstone”) (TSX: TXP) of a loan managed by Crown.

Touchstone is a Calgary-based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. In November 2016, Crown Capital Partner Funding, LP (“Crown Partners Fund”) provided a $15.0 million, 60-month term loan to Touchstone. The term loan was later increased to $20.0 million and the maturity was extended to November 2023. The arrangement also included a production payment agreement (maturing October 31, 2023), entitling Crown Partners Fund to a quarterly payment of 1.33% of Touchstone’s gross revenue from production.

“The Touchstone team has done an outstanding job executing its growth plan during a generally challenging period for the oil and gas industry, benefiting from a low-cost production model and an increasing focus on natural gas,” said Chris Johnson, President and CEO of Crown. “With a new senior loan facility in place with a Trinidadian bank, the company is in a solid financial position and we wish them continued success.”

Paul Baay, President and Chief Executive Officer of Touchstone, said: “Crown Capital has been a longstanding and supportive financial partner for our business, providing us the capital and flexibility to focus on the development of our onshore Trinidad assets and pursue our other operational priorities.”

Touchstone has prepaid the loan in full, including principal, interest and fees. The loan was held by Crown Partners Fund, an investment fund managed by Crown and in which Crown holds an approximate 39% interest. The production payment agreement will remain in place and will provide Crown Partners Fund with quarterly payments until October 31, 2023.

The Gross IRR to date on Crown Partners Fund’s investment in Touchstone is 16%, inclusive of the estimated current value of the production payment agreement.

About Crown Capital Partners (TSX:CRWN)
Founded in 2000, Crown is a leading specialty finance company that provides growth capital to a diversified group of successful mid-market companies that are seeking alternatives to banks and private equity funds. Crown provides customized solutions in the form of loans, royalties, and other structures with minimal or no ownership dilution. In addition to deploying capital as a principal investor, Crown develops, manages and coinvests in alternative investment funds, including Crown Partners Fund and Crown Capital Power Fund.

FORWARD-LOOKING STATEMENTS
This news release contains certain “forward looking statements” and certain “forward looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”,
“estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown’s periodic filings with Canadian securities regulators. See Crown’s most recent annual information form for a detailed discussion of the risk factors affecting Crown. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

For further information, please contact:
Craig Armitage
Investor Relations
[email protected]
(416) 347-8954

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Crown Capital Partners Announces Repayment of Loan by Touchstone Exploration2020-06-15T20:56:46+00:00

Crown Capital Partners Announces Q1 2020 Financial Results, Strategic Update and Suspension of Dividend

CALGARY, May 5, 2020 – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), a capital partner to entrepreneurs and growth businesses, today announced its financial results for the first quarter ended March 31, 2020. Crown’s complete financial statements and management’s discussion and analysis for Q1 2020 are available on SEDAR at www.sedar.com.

Q1 2020 Financial & Operating Highlights

  • Interest revenue was $7.3 million, compared with $8.0 million in Q1 2019.
  • Total revenue increased to $6.4 million, compared with $(4.0) million in Q1 2019 due mainly to a significant decrease in the net loss on investments, from $(13.5) million in Q1 2019 to $(3.2) million in Q1 2020.
  • Adjusted Funds from Operations1 increased to $4.2 million, representing the highest quarterly amount in the past eight quarters, compared with $0.7 million in Q1 2019.
  • Net loss of $(1.2) million (Q1 2019 – net loss of $4.0 million), or $(0.13) per common share (basic) (Q1 2019 – net loss of $0.41 per share). The net loss for the current period mainly reflects a net unrealized loss on investments of $3.6 million from reductions in the fair values of investments of Crown Partners Fund.
  • Total assets increased to $338.0 million at quarter-end, compared with $299.7 million at December 31, 2019, due mainly to new loan advances in the quarter.
  • On March 27, 2020 Crown paid a quarterly dividend of $0.15 per common share.
  • Crown Power Fund commenced construction on two new distributed power projects, increasing
    the total number of projects in development or in operation to 11.
  • Crown Partners Fund advanced the remaining $6.1 million to VIQ Solutions available under the $15.0 million loan facility established in 2018.
  • Crown Partners Fund announced two transactions for up to $35.5 million:
    • A five-year term loan of up to $30 million to Centric Health Corporation, of which $22 million has been advanced.
    • A two-year, $5.5 million term loan with CCI Wireless.

“Since our fiscal 2019 results were announced in March, we have adapted our operations to address the COVID-19 pandemic. Our business continuity plan enabled us to seamlessly operate from remote locations and ensure the health and safety of the team,” said Chris Johnson, President and CEO of Crown. “This is a rapidly evolving environment which creates considerable uncertainty for Crown and our borrowers. While we expect most companies will be affected to some degree and will be required to adapt, the portfolio is currently in stable condition overall and we remain highly diligent in our portfolio management. There is an ‘all-weather’ aspect to our investment strategy that served us well through the 2008 global financial crisis.”

“Crown’s management team has extensive experience analyzing and assessing value of businesses of all types. We believe that the public markets are not reflecting a fair value for Crown’s business and do not provide ready access to capital,” added Mr. Johnson.  “In addition to the structural challenges facing almost all small-cap companies, alternative lenders are trading at persistently high discounts to their underlying asset values. Over a 4-year period, Crown has traded at an average price-to-book multiple of 0.85 times, a 15% discount. Currently Crown’s common shares currently trade at less than 50% of its $10.05 book value as at March 31, 2020. The status quo is not acceptable and while this is not a new realization for our management team, the current environment has led us to accelerate a repositioning of the Corporation’s balance sheet to be more capital efficient.”

“As we undergo this transition, we’ve made the decision to suspend shareholder dividends. Our focus is on increasing earnings per share over the medium to long term, and we believe in light of the current market realities, funds available for distribution will be more impactful for shareholders to be used for strategic investments and share buybacks.”

“We’re optimistic about the future. While we expect a significant and sustained economic recession, past experience suggests economic crisis creates opportunity for alternative finance providers.  Quality businesses need capital and traditional providers often retreat in times of uncertainty. Additionally, our team strongly believes that through the repositioning of the balance sheet described below, we will emerge as a much more profitable, diversified finance platform with a larger market opportunity.”

Update on Operations

Alternative Corporate Financing Investments

At March 31, 2020, our Alternative Corporate Financing investments stood at $275.4 million, including Special Situations Financing investments of $240.4 million and Long-Term Financing investments of $35.0 million. Our Special Situations Financing investments are managed through Crown Partners Fund, in which Crown holds an approximate 39% interest.

We are actively monitoring the impact of the COVID-19 pandemic and the related economic impacts on the health of our portfolio companies. The current environment is a rapidly evolving situation which creates uncertainty for us and our borrowers. All our portfolio companies will be affected with some of them being forced to take aggressive measures to adapt. The duration and impact of this pandemic are unknown at this time, and the longer the situation continues, the more uncertainty there will be regarding the business, operations, financial condition and/or underlying security value of our borrowers. We presently believe the impacts of the current situation will not result in the failure of any of our borrowers and will likely have only a minimal impact on their ability to make payments to Crown. In addition, while there is increased volatility in global oil markets, Crown’s energy clients have substantial natural gas exposure, which is expected to provide a measure of stability to these companies.

We believe the market instability caused by the COVID-19 pandemic will result in a further weakening of the credit cycle and, ultimately, a net increase in investment opportunities in our Special Situations Financing segment when corporate lending transaction activity returns to normal levels. We continue to believe Crown Partners Fund will grow to $500 million in assets over time.

Distributed Power Investments

In our distributed power business, we remain focused on bu