Steele Creek Capital Announces Share Repurchase Program

Focused on strategic adjustments, Steele Creek aims to optimize its capital structure while maintaining strong financial positioning.

December 02, 2024

Share Repurchase Offer

Steele Creek Capital Corporation, a business development company focused on middle-market investments, has unveiled plans for a cash tender offer to repurchase up to 620,480 shares of its common stock. This move, representing 10 percent of its average outstanding shares over the past year, aligns with the company's commitment to enhancing shareholder value. The offer will be priced at the stock's net asset value (NAV) as of December 31, 2024, with a closing date set for the same day.

Financial Details and Strategy

The NAV per share stood at $9.71 at the end of 2023, but the buyback price reflects a slight adjustment to $9.5077 based on updated calculations. The tender offer is designed to return excess capital to shareholders while potentially boosting per-share NAV for remaining shareholders. The transaction’s maximum value is estimated at $5.9 million, with an associated filing fee of $903.

This strategic initiative comes amidst a challenging investment landscape for closed-end funds like Steele Creek. By reducing outstanding shares, the firm anticipates a more efficient capital base, though it also acknowledges the potential reduction in income due to smaller asset volumes.

Implications for Stakeholders

The tender offer may lead to a marginal increase in the proportional holdings of affiliates and non-tendering shareholders. However, directors and executives have indicated they do not plan to participate in the buyback, signaling confidence in the company’s long-term prospects. The offer is also structured to avoid material differences in shareholder rights post-transaction, ensuring continuity and fairness for all stakeholders.

Regulatory and Legal Framework

Filed under the Securities Exchange Act of 1934, this tender offer adheres to the strict regulatory framework governing business development companies. Steele Creek's previous financial statements for 2023 and unaudited figures for the third quarter of 2024 provide a robust basis for transparency and compliance.

Positioned for Long-Term Growth

Steele Creek Capital Corporation’s proactive approach to managing its capital structure reflects its focus on shareholder returns and market adaptability. This repurchase offer demonstrates the company’s readiness to navigate a competitive environment while maintaining its operational resilience and investment strategy.