NEW YORK, Aug. 1 /PRNewswire-FirstCall/ -- Saratoga
Investment Corp. (NYSE: SAR), the new name of GSC Investment Corp.
(formerly NYSE: GNV), has completed a $55
million recapitalization to cure GSC's debt default and to
provide working capital to grow its middle-market lending
business.
The recapitalization was effected through the purchase of a
minority stake in the Company by an investor group led by Saratoga
Investment Advisors, LLC, a New
York-based investment firm affiliated with Saratoga
Partners. The deal was approved by a majority of GSC
shareholders at a special meeting held in New York on July
30. With the purchase, in addition to changing the
name of the company to Saratoga Investment Corp., senior managers
of the business were replaced and a new NYSE stock ticker symbol,
SAR, was adopted. Company headquarters will be in
New York City.
Under the terms of the transaction, Saratoga, CLO Partners and certain individuals
purchased 9.9 million shares of common stock of GSC Investment
Corp. for $1.52 per share for a
minority investment of approximately 37% of the Company's equity.
Saratoga and CLO Partners are entities wholly or majority
owned by Christian L. Oberbeck,
Managing Director of Saratoga Partners, an affiliate of
Saratoga.
The recapitalization plan includes a $40
million senior secured revolving credit facility from
Madison Capital Funding LLC. Saratoga Investment Corp. has
borrowed funds under the new credit facility that, together with
the $15 million equity investment,
were used to repay the full amount of the outstanding indebtedness
of the Company's debt facility with Deutsche Bank, which was then
terminated.
Saratoga has replaced an
affiliate of GSC Group as the Company's external investment manager
and administrator. GSC Investment Corp.'s officers have been
replaced by corporate officers of Saratoga. Christian L. Oberbeck is the
new CEO and Richard A. Petrocelli is
the new CFO and CCO. Saratoga intends to augment its
capabilities in the management of the Company's investments with
additional professionals with experience in the management and
origination of debt investments and collateralized loan
obligations.
Similarly, the Company's board members affiliated with GSC Group
have been replaced by Oberbeck and Petrocelli. The overall
size and composition of the board otherwise remains unchanged.
Saratoga Investment Corp. plans to effect a 1:10 tax-free
reverse stock split, pursuant to which each Company stockholder
will receive one share of Company common stock in exchange for
every 10 shares owned at that time. After giving effect to
the minority investment by Saratoga and the 1:10 reverse stock split, the
total number of shares of Company common stock outstanding will be
approximately 2.7 million.
Oberbeck, as CEO of Saratoga Investment Corp., said, "We will
work to restructure the portfolio of the former GSC Investment
Corp. and actively seek participation in middle-market loan
syndications and direct lending to middle-market companies.
We are confident that Saratoga Investment Corp. will be a
successful and growing company serving the financing needs of
middle-market businesses."
Stifel, Nicolaus & Company, Incorporated served as financial
advisor to GSC Investment Corp. in connection with the transaction.
Venable LLP served as GSC Investment Corp.'s legal counsel on
Maryland law and related matters
and Davis Polk & Wardwell LLP
served as GSC Investment Corp.'s legal counsel in connection with
the transaction and related matters.
Sutherland, Asbill & Brennan LLP served as Saratoga's legal counsel in connection with
the transaction and related matters.
About Saratoga Investment Corp.
Saratoga Investment Corp. is a specialty finance company that
invests primarily in leveraged loans and mezzanine debt issued by
U.S. middle-market companies, both through direct lending and
through participation in loan syndicates. It has elected to
be treated as a business development company under the Investment
Company Act of 1940. Saratoga Investment Corp. is traded on
the New York Stock Exchange under the symbol SAR.
About Saratoga Investment Advisors
Saratoga Investment Advisors is a New
York-based investment firm formed to focus on credit-driven
strategies. It is the manager of Saratoga Investment Corp.
and is affiliated with Saratoga Partners, a leading middle-market
private equity investment firm with $750
million of committed and invested institutional equity
capital. Saratoga Partners primarily invests in businesses
with strong management teams and valuations of between $50 million and $500 million, specializing in
companies in manufacturing and business services. It also has
a successful record in special situations and distressed
investing.
Since Saratoga was founded in
1984 as a division of the New York
investment firm Dillon, Read & Co., Inc., it has invested in 33
companies with an aggregate value of more than $3.7 billion. It has been an independent
firm since its spinoff in 1998 after Dillon
Read was acquired by Swiss Bank Corporation (a predecessor
to UBS AG). Saratoga is an alternative asset investment
manager led by its Managing Directors, Christian Oberbeck, Richard Petrocelli and Charles Phillips.
Forward Looking Statements
This press release may contain certain forward-looking
statements, including statements with regard to the proposed
reverse split of common stock and other actions described in this
press release. Words such as "intends," "believes,"
"expects," "projects," and "future" or similar expressions are
intended to identify forward-looking statements. These
forward-looking statements are subject to risks and uncertainties
and other factors enumerated in the filings Saratoga Investment
Corp. makes with the SEC. Saratoga Investment Corp.
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
SOURCE Saratoga Investment Corp.
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