Metage Capital Limited: MVC Capital Inc.'s Latest Proposed Actions are Trivial Compared to Those Needed to Address its Discount

NEW YORK, October 16, 2017 /PRNewswire/ --

On October 10, 2017 MVC Capital Inc. (NYSE: MVC) announced a plan to "Increase Shareholder Distributions"^[1]. Metage Capital Limited wants to respond to these new proposals and explain why we believe that they are wholly insufficient to address the Company's poor performance and the significant discount on the Company's shares.

The value of these proposals is a rounding error. The only additional commitment to distribute capital to shareholders is to increase the quarterly dividend by 1½ cents per share or just $317,000. This distribution is a rounding error relative to the over $100,000,000 in cash currently on MVC's balance sheet^[2]. We question why the Board believes that this will have any material impact on the discount, given the last tender offer was for $15,000,000 and was 2.5x oversubscribed.

After four and a half years, MVC is still examining the repurchase of shares. The company has had a mandate to repurchase shares since April 3, 2013^[3]. After over four years of supposedly operating a share repurchase program, MVC announced that it is only "…actively exploring opportunities to repurchase common shares". We note that there is no commitment on the value or the number of shares that the Company is seeking to repurchase.

MVC's share price has not responded to the Company's latest proposals. This is hardly surprising as the market has known about MVC's desire to invest into yielding assets since at least 2014^[4].

The Company cannot dispute that it has made a loss over the last five years^[5]. Instead they have cherry-picked the return on a single investment and the performance of just 6 exited high-yield loans. Metage encourages all shareholders to assess MVC's performance independently to judge whether it has been acceptable.

Metage's Proposal requests that the Company cease making new investments and return capital to shareholders, for as long as the discount between MVC's share price and its last reported NAV per share exceeds 10%. We continue to believe that this will have the effect of ensuring that the Company targets a reasonable discount for its shares and that capital is allocated wisely.

We encourage all Shareholders in MVC to support Metage's shareholder proposal and to stop thedestruction of shareholder value 

This is not a solicitation of authority to vote your proxy.  The cost of this filing is being borne entirely by Metage.

PLEASE NOTE: METAGE IS NOT ASKING FOR YOUR PROXY CARD AND CANNOT ACCEPT YOUR PROXY CARD. PLEASE DO NOT SEND US YOUR PROXY CARD.

References:
1. DEFA 14A: Definitive Additional Proxy Materials, date filed October 10, 2017.
2. Form 10-Q for July 31, 2017: Last reported cash on balance sheet, adjusted for the recent tender.
3. Form 10-Q for July 31, 2017: Note 13, Share Repurchase Program.
4. 2013 and 2014 Annual Report: refers to hiring four debt professionals to accelerate the transformation to include more currently yielding investments.
5. Total NAV return including dividends from July 31, 2012 to last reported NAV on July 31, 2017. Source http://www.mvccapital.com; Bloomberg.

Tom Sharp
Metage Capital Limited
Email: [email protected]
Tel: +(44)-203-813-8590

SOURCE Metage Capital Limited and MVC Capital Inc.