Initial investment in Asian winter tourism
Adamas Finance Asia (“ADAMâ€) aims to be the leading London-quoted pan-Asian focused diversified SME investment company. It targets above average income and capital growth, with a stated objective to provide shareholders with unique access to a diversified portfolio sourced from high-growth Asian economies.Their latest investment fits its investment mandate by providing an immediate, attractive income stream, which reaffirms the potential for future dividends, and capital growth over the medium term. Furthermore, the attractive terms agreed confirm the management’s view regarding the acute shortage of traditional sources of finance to many borrowers in its target Asian markets.
ADAM has agreed to finance the development of a premium residential project in Hirafu Village, located in the Niseko Ski Resort in Hokkaido, Japan, one of the world’s most popular winter travel destinations. It will provide the borrower, Infinity Capital Group Limited (ICG) with a US$4m senior secured loan note, fully secured by other ICG assets in Niseko. The coupon is 17.5% pa, payable in cash with the first tranche drawn imminently according to the Company, and ADAM receives warrants.
This transaction is a timely reminder of the Investment Manager’s ability to source and execute attractive deals, and its plans to build cash flows to support future dividend payments.
ADAM shares are currently 48% below end September 2018 (unaudited) NAV/share. We believe that gap discounts any perceived risks and offers attractive potential upside as Harmony Capital further builds ADAM’s portfolio with Asian SMEs.
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