Loading, Please Wait...
HOUSTON, Jan. 24, 2019 (GLOBE NEWSWIRE) -- Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Company”) today announced that its shareholders have granted a new authorization to the Company’s Board of Directors (hereinafter, the “Board”) to cause the Company’s withdrawal of its election to be classified as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Previous authorizations to this effect were given to the Board in 2017 and 2018, all of which have since expired. The new authorization given to the Board by the Equus shareholders expires on July 31, 2019. These authorizations are a consequence of the Company’s Plan of Reorganization announced on May 15, 2014 (also referred to herein as the “Plan”).
In announcing the Plan, Equus stated its intention to implement the Plan which entailed, among other things: (i) the restructuring of the Company by way of an acquisition of, or merger with, an operating company (referred to in the Plan as a “Consolidation”), and (ii) a withdrawal of the Company’s election to be classified as a BDC. Although Equus has been authorized to withdraw and terminate the Company’s BDC election under the 1940 Act, it will not submit any such withdrawal unless and until Equus has entered into a definitive agreement to effect a Consolidation.
The Company’s Board of Directors, together with management, regularly reviews and evaluates the Company’s performance, prospects and long-term strategic plans in light of the Company’s business and the industries in which it invests. These reviews have included periodic consideration of potential strategic transactions to maximize value to shareholders. Management of the Company has explored various strategic options to maximize shareholder value that could, if effected, result in the acquisition of the Company by another corporation or a change in the Company’s structure from a BDC into an operating company. These efforts culminated in the adoption of the Plan.
Since the adoption of the Plan, Company management has examined a number of potential transactions and strategic alternatives to effect a Consolidation under the Plan. On April 24, 2017, Equus entered into an agreement to acquire U.S. Gas & Electric, Inc. (“USG&E”), a retail and commercial energy services provider. This agreement was terminated on May 30, 2017 by USG&E when it notified Equus that the USG&E board had received an acquisition offer from a third party that was deemed by USG&E to constitute a “Superior Proposal” to the terms and conditions offered to the USG&E shareholders by the Company. Since the termination of the agreement to acquire USG&E, the Company has again examined a number of potential transactions in a variety of industries, including energy, natural resources, containers and packaging, technology, and telecommunications.
While Equus is endeavoring to achieve a Consolidation and is presently evaluating various opportunities that could enable it to do so, no assurance can be given that the Company will be able to complete a Consolidation before July 31, 2019 or at all. Moreover, no assurance can be given that the terms of any such transaction that would embody a Consolidation would be acceptable to the Company or its stockholders.
The completion of the Plan and the restructuring of Equus into an operating company are subject to various conditions, risks, and uncertainties, among which include the following:
These risks should be considered in addition to the items identified as “Risk Factors” in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 17, 2018.
This press release contains certain forward-looking statements regarding possible future circumstances. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the performance of the Company, including our ability to achieve our expected financial and business objectives, our ability to execute our reorganization (including a possible Consolidation) and complete the transactions contemplated thereby, the other risks and uncertainties described herein, as well as those contained in the Company’s filings with the SEC. Actual results, events, and performance may differ. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statements are material.
Pristine Advisers, LLC