sqn secured income fund plc - london stock exchange · sqn secured income fund plc registered...

SQNSecuredIncomeFundPlc

Registeredoffice:Level13BroadgateTower,20PrimroseStreet,LondonEC2A2EW

Registeredno.09682883

InvestmentUpdate–7thOctober2019Aheadofthereleaseofourfullyearfinancialreport,weconsideritagoodtimetoreleaseabroadanddetailedinvestmentupdate.

• DirectLoansrepresent67.32%oftheportfolioandhaveagrossyieldof10.9%

• Thirdpartydebtnowrepresents28.2%oftotalassets

• PeertopeerlendingisatthelowestsinceSQNassumedmanagementat7%

• DividendcoverhasdoubledsinceSQNtookovermanagementrisingfrom0.52inMarch2017to1.01inAugust2019.

• IFRS9forwardlookingprovisioningtoriseasrumpassetsdiminishinoverallvalue.

• ProposalsforthefutureoftheCompanyareunderreviewbytheBoardandweareconductingtestmarketingwithShareholdersonoptions.

Wearepleasedtoreportcontinuedsteadyprogressindeliveringa7ppersharedividendandhavebeenabletodeliverastableNAVperformancetodate.ThissteadystatebeliesanawfullotofworkthathasbeendonetoinvestahigherallocationtotraditionalunderwritingandstabilisationofthelegacyportfolioinheritedfromthepreviousmanagementinApril2017.


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Source:BloombergDatainitalicssubjecttorevision.

Source:SQN

Thefollowingtableshowsthebreakdownoftotalexposuretospecificloantypes:

SourceSQN


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TheCompanyhassuccessfullyreducedpeertopeerlendingtoonly7%oftheportfoliovalueandhasreducedoveralllegacyloanexposureto£14.9m.Thiscontinuestofallandwillbeacceleratedbytherun-offofoursinglebiggestpositioninaco-investedventuredebtbookwherewehavestartedtoreceivelargercashsumsasdebtisrefinancedbyborrowers.Atpresent,impairmentdataremainsverylowunderIFRS9provisions,howeverwedoexpecttheimpairmentprovisionrelatedtothepeertopeersegmentoftheportfoliotorisebycirca2.5%aswehavereassessedtherisksassociatedwiththisrumpexposureandafulleranalysisofthisfollowsthereviewoftheportfoliobelow.Thesepositivedevelopmentsfortheportfoliohavebeenachievedwithouttheuseofleverageforinvestmentorworkingcapitalpurposes.WithBrexituncertaintyremainingacorethemeforinvestors,wehaveanalysedourdirectloansandarecomfortablethatwehavesuitabledownside protection embeddedwithin the portfolio to sustain the portfolio through anyimpactofarecessionintheUKandmainlandEurope.Bycontrast,thelegacypeertopeersegmentoftheportfolioremainsachallenge.Given the nature of the investments and the less predictable nature of repayments fromlegacypositions,wecontinuetoseethisasachallengeregardingtimingofreinvestments.Despitethis,wehavepaidcloseattentiontodeliveringacovereddividendandcanconfirmthatthisisnowstable,withtheexpectationthatitwillremainsoforthenextyear.WehaveprovidedareviewofprogressbelowandcomparesfavourablytothepositionasatMarch2017whendividendcoverwas0.52whencomparedtothepositiontodaywheredividendcoverstandsat1.01:

Source:SQN


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PortfolioUpdateWearefocussedonunderwritingofthehighestqualityinthelowermiddlemarketsegmentof the market with thirteen loans now underwritten by SQN, with an average of £2.6mdeployedper loanandatanaverage interest rateof10.9%. Each loanhasbespoke legaldocumentationand isdesignedto fit to theCompany’sand theborrower’s requirements.Therehavebeennolateormissedpaymentsinthisportionoftheportfolioandourcovenantmonitoringdataisuptodate.Theoutlookfortheperformanceoftheseloansremainsverygood.Asreflectedonourfactsheetspublishedeachmonth,wemadeachangetothewayinwhichwecategorisethelegacyportfolio.Wehavedifferentiatedbetweenpeertopeerloansandthosethatareheld inLoanNotestructureswithprofessionalcounterparties. These latterloans are larger in quantum and we have a closer relationship with the underlyingmanagementcompanies.Thetotalnumberofloansviathirdpartieshavebeenreducedfrom213to55withasmallnumberofloansamortisingoutoftheportfolioeachmonth.Allnon-Sterlingcapitalandincomecontinuestobefullyhedged.FluctuationsinthevalueofSterlingduringthereportingperiodhasmadeforsomesignificantmovesinthecostofthishedgingandthishasbeenmitigatedbyreducingbrokeragecostsandcarefulmonitoringoftimingofhedgerolls.RiskManagementBrexitcontinuestodominatetheinvestmentlandscapeasdelayintheexitoftheUKfromtheEuropeanUnionwasextendedfromMarch2019toOctober2019andpotentiallybeyond.Wehaveconsideredtheriskassociatedwithourcurrentandfutureinvestmentswithgreatcareandhaveapproachedthisworkfromfourdirections:underwriting,currency, interestratesandduration.

• Underwritingisstresstestedfora10%fallincashflowswithlittleimpact.Ourloansaresenior,collateralisedandwefocusondebtserviceratios.Weusebespokelegalstructuresallowingustotakecontrolofbankaccountsinextremis.Covenantsremaininkeepingwithexpectationsbutasalenderofovertwodecadesexperience,wehavenever seen a default result from a non-financial breached covenant; cashmanagementistheprerequisitefactorweconsider.

• Allnon-Sterlingcurrencyexposuresarehedged.TheCompanyhasaSterlingbaseandShareholdersshouldexpecttobehedgedagainstadversemovementsandwehavefulfilledthisrequirement.

• All loans are fixed rate and our borrowers have a low sensitivity to interest ratemovements.Theoverallportfoliohasnogearingatthefundlevel.

• As a fixed income manager, Shareholders should expect us to monitor durationregularly. We have made great efforts to reduce duration and this has beensuccessful. The single biggest duration contributor is our investment with a UKventuredebtplatformwhereweinvestedviaaLoanNotestructurewithanineyear


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investmentperiod.However,asthisfundisnowinrun-off,weexpecttheweightedaverage duration of the portfolio to diminish further over the coming year. Asdemonstrated in the graph below,when thematurity of these loans is taken intoaccountthematurityprofileimprovessignificantly.

Source:SQN


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SQNUnderwrittenDirectLoansThefollowingprovidesanarrativerelatingtosomeofourdirectloaninvestments.Namesofcounterparties have been omitted for commercial and business sensitive reasons for ourborrowers.Allborrowersareuptodatewithcapitalandinterestpaymentsandallinterestandcapitalhasbeenpaidinaccordancewithourloanagreements.

• Medical Services Provider in UK – the business is well managed and provides anessentialmedicalservicetotheNHSandprivatepracticesinLondonandthenorthofEngland. Patientnumbersweakenedforpartof theyearbut theaveragehasmettargetexpectationswithSummer2019deliveringthehighestpatienttreatmentssince2017.Thebusinessisinasaleprocessandwehavecovenantsrequiringtheloantoberepaidintheeventofchangeofcontrolwithpenaltycostsapplied.

• Wholesale Lending group - the business remains stable and has delivered theexpected returns to the Company. All loan-to-value investments have remainedwithintheirlimitandallindicatorsare“green”statusunderourmonitoringregime.Wealsoreceiveaquarterlyexternalauditoftheperformanceofthebusiness.Thereweresomemanagementchangesduringthereportingperiodthatwewereconcernedabout, including a new FD and originationmanager, to replace retiring personnel.After a short period,when it became clear that these newhireswere not a goodculturalfit,theexecutivemanagementquicklyreversedthesedecisionsandrevertedtoastableteam.

• LeasingGroup–strongperformancefromaverygoodmanagementteambasedinthenorthofEngland.SQNprovidesafacilitytofundanumberoftransactionswhicharethenrefinancedviablockdiscountersatcheaperrates.

• LaserandLEDmanufacturer–weakerperformancecomparedtolastyearbutthisisduetoaoneoffcostofrelocationoftheentirebusinessfromUKtoIreland.Wearerelaxedasinterestandcapitalisallbeingrepaidontimeandthatthebusinesshasasuitablesalespipelinetomeettheirdebtcommitments.

• MarineServicingCompany–aservicecompanyspecialisinginrenewableenergybuildandmaintenancecontractsaswellasbridgeandoilfieldservicemaintenance.ThecompanyexpandedduringthereportingperiodacquiringasignificantfleetintheUSasthiswaspartofastrategicexpansionplanimplementedin2018.Theyhaveequitysupportfromanumberof infrastructureinvestors. Withthis largerassetbaseandbackedbystrongandexperiencedshareholders,thiscompanyiswellpositionedtokeepincreasingitsutilisationratesandtoimproveitsprofitability.

• Production Financing - Pre-sales and tax rebates plus completion insurancemakethesetransactionsofferthemostbalancedofrisksfortherateofreturnandwehaveadded comfort via a cross-collateralisation mechanism across all deals, providinghealthy diversification. All assets are performing to expectation and within ourmonitoringguidelines.WekeepaclosebusinessrelationshipwiththeprincipalsandalsoadviseonSPVstructuringandcurrencyhedging.


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Allinall,thisbookofloansisperformingtoexpectationsandweconsiderthateachcompanyhassuitablecashreservesandcapacityforgrowthtosustaineventhehardestofeconomicshock.Involatiletimes,cashistheprevailingmetricbywhichwejudgeourexposures.Thisisquitedifferenttotheobsessionwithstrengthofcovenantsthatissooftenthefocusofhighyieldand leveraged loan investors. Thiswas recentlydemonstratedwhenWrightbus, themanufacturer of public transport vehicles, was placed into administration due to cashshortfalldespitehavingahealthyorderbook.LegacyportfolioCo-InvestmentsAsmentioned,SQNdecidedtoreclassifythewayinwhichthelegacyportfolioisdescribed.Thisreflectsthespecificdifferencebetweenpurepeertopeer,technologyplatformbasedlendingandthreeinvestmentsthatarecharacterisedbyprofessionalco-investmentalongsidethe British Business Bank and another counterparty. There has been some significantcorporatechangeforallthreeoftheseinvestmentsandweprovidethefollowingnarrative:UKVentureDebt–twoofthethreeprincipalsofthecompanyresignedduringthereportingperiod. ThistriggeredaclauseintheLoanNoteagreementthatallowedustotakeclosercontroloftheprocessofmanagingtheportfolio.Inreality,thismeansthatanyinvestmentdecisionneedstobeagreedbyshareholdersandgivesusflexibilityinguidingassetstherein.Theremainingprincipalremainscommittedtothesuccessfulrun-offoftheportfolioandhasrecruitedsuitablecolleaguesasreplacements.Astheportfoliorunsoff,wewillreceivecashearlierthantheoriginalmaturityoftheLoanNote,allowingforacceleratedreinvestmentintotraditionallyunderwrittendirectloans.IrishVentureDebt–thiscompanywastransferredtoBeachPointCapital,“BPC”,aUSPrivateEquity company.Wemadeadecision to follow themanagerand reinvestunder thisnewentity.AlthoughwehavelimitedbandwidthtoinvestinthesegmentinwhichBPCspecialises,wehaveahighdegreeofconfidenceintheircapabilitytodeliverriskmanagedreturnsof10-14%. This investmentisnowcategorisedasadirect investmentandwillnotexceedmorethan10%oftheportfolio.Small Company Bond Platform was a UK based debt platform for very small businessesrequiringcirca£1mloans.InOctober2018,wenotedanalertfromtheCompaniesHouseservice that all the original directors had resigned. InDecember,we received a no-replynotificationviaemailthatadministrationofourinvestmenthadtransferredtoathirdparty.We have since discovered that the company has now re-emerged as a crypto-currencybrokerage.Priortotheseevents,wehadassessedthisrelationshiptobeofthehighestrisktotheportfolioandhadengagedinadirectdialoguewithallthreecounterpartieswithwhomwehadoutstandingloansviatheplatformandanexistingbankruptcycasealreadyimpairedwithin the portfoliowherewe have a direct relationshipwith the liquidator. This actionprovedtobeprescientandhasensuredthatwehavebeenabletonegotiatearefinancingoftwoofthethreeloanswhichwillbothroll-offourloanbookinQ4,2019.Thefinalloanisduetomaturein2020andweareindirectdialoguewiththeparentcompanyoftheborrowertofacilitateearlyrepayment inQ4,2019. Wehavealsohadgood interactionswiththenew


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administration agent and have been receiving interest and capital payments on all threeoutstanding loans. The impaired loan involves an investigation of irregular financialaccounting,ismakingslowprogressbutthereisapossibilityofrecoveringsomevalueandwewillremainpersistentinourendeavourtorecoupasmuchcapitalaspossibleforShareholdersdespitetheplatformomittingtoincludeitintheitemssenttotheadministrator.Wereceiveregular reports on progress from the liquidation agents and again, our relationships arehelpingtomaintainmomentum.Despitedisappointmentattheprovisionfortransitionalarrangementsfromthepreviousandpresentownersofthisplatform,wearepleasedtoreportthatfurthertoourcarefulactions,loancapitalhasbeensecuredforourShareholdersandwehavebeenabletoclawbackcashthatwouldhaveotherwisebeenimpaired.Weclassifythissegmentoftheportfolioaslessofariskthanpeertopeergiventhecloseinteractionwithborrowersandmanagersand thequalityof thecompaniesunderwritten.However,asdemonstrated,theyarestillexposedtounorthodoxmanagementstandardsandchangesinfocusofparentcompaniesandpersonnelchangewhichrequiresustobevigilant.PeertoPeerThroughoutSQN’stermasmanagerofthisportfolio,wehaveconsistentlywarnedoftherisksassociatedwithpeertopeerlendingandhaveendeavouredtodiminishriskassociatedwiththisassetclassforourShareholders. Asareminder, it isourviewthatweakunderwritingstandards,volumedrivenlendingandnodirectcontactwiththeborrowersmakesthissectortoovolatileforavehicleassociatedwithsenior,securedlending.Tothisend,ithasbeenourintentionandobjectivetoreduceriskexposuretothisassetclassasquicklyaspracticable.We assess the probability of repayment on a continuous basis, making impairmentadjustmentsasappropriate.WehavecontinuedtomitigatetheseriskssinceApril2017byreducingoverallexposureandkeepingcloserelationshipswiththeplatformproviders.Havinginheritedsixlendingplatformsfromthepreviousmanager,ourstrategyhasbeentodivestasrapidlyaspossible. SinceassumingmanagementoftheFund,wehaveremovedthreeoftheseinvestmentplatformsfromtheportfoliobysellingtheexposureorencouragingearly repayment. However, as these positions continue tomature corporate change hasoccurredattheremainingplatformswhichmeanstheyremainatime-consumingchallenge.Threesuchinvestmentsremainwithintheportfolioandwecommentonourassessmentoftheseplatformsasfollows:UKPeertoPeerlender–theownerchangedthenameoftheplatformandmergeditwithotherproperty-basedlendingbusinessesheldundertheircorporatestructure. Theparentcompany has stated their intention towithdraw from this segment of themarket and ismanagingarun-offportfolio.Wemonitorcarefullyandintervenewhenweconsiderthemtobetoolenientwithborrowers.Itwouldbefartooeasyforanintermediarytowrite-downdebt,allowingborrowerstowalkawayfromtheirliabilities,leavingnotonlyusbutaminorityof retail investors with losses. Therefore, we apply maximum pressure to constructmanageablerepaymentplansand,insomecases,liensonpropertyorotherassets,allowingforadditionalrecoupofvalueforourShareholders.


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USPeertoPeerlender–thisremainsourlargestpeertopeerinvestmentandalthoughtherelationshipremainsgenial,thispositionisjuniorinthecapitalstructureoftheplatformandrepresentsariskofloanimpairmentandthereforeofwrite-down.InMarch2019,wemetwiththepeertopeerplatformowner/founderandagreedanincentiveplanforthemtoworkharderoncollectionsandagreedaquarteryearforimprovement.Theyinformedusthattheyhadwrittendown100%ofthisportfoliointheiraccountsandwefounditperplexinggivenprevious reporting although not surprising given that they were in negotiations with aEuropean direct lender owned by a larger retail bank to sell their business and that thisportfoliowastheirfirstwiththeseniordebtheldbyanaggressivehedgefundfinancier.AsalewouldleavethebusinessinastrongerpositionfinanciallyandgiveaddedcomfortfortheadditionalpromissorynoteheldbytheFundagainsttheparentcompany,sowedonotwanttothwartthisprocessbysappingresources.Wealsoadvisedtheplatformowner/founderthatifnoimprovementwasforthcoming,wewouldtakeovercollectionsandexplainedthatwehaveagoodtrackrecord,togetherwithour partners, in achieving better returns. Our work-out rate for transactions can bedemonstratedbyourperformanceinourassetfinancestrategyanddirectloanstrategyoverthelasttwentyyears.InJune,havingobservedslowprogress,webeganaseriesofmeetingstoagreeplansoutlinedinthepreviousquarter. TwoexecutivesfromSQNvisitedNewYorkinJulyandAugust,toagreeaprocessforthewayforwardandtohaveanupdateonthesaleofthebusiness.Atthe time, theywere in themiddle of a two stage Due Diligence being conducted by thepotentialbuyerandKPMG.Duetotheresourcedragforthiswork,theyrequesteduntilendAugusttocommencesendingfiles.Atthetimeofwriting,wearewaitingfortheplatformtotransferallborrowerfilestous.Onreceipt, we will begin the process of making our own assessment of the probability ofrecovery and engage with attorneys and collection agencies. Again, this represents asignificantresourcecommitmentforSQNandwewillremainuncompromisinginourpursuitofthisendeavoureventhoughitrepresentsasmallportionoftheoverallportfolio.Wealsointend to engage Valentine & Kebartas, https://valentineandkebartas.com/ who have anaggressive reputation forcollections. Given the timethathaspassedandspeedatwhichinformationisreceived,wehavedecidedtoimpairthisplatformexposureby25%.Thisisapre-emptivemoveandtakesintoaccountourownassessmentof individual loansthatarenowbeingmanagedoutbyattorneys.SpanishPeertoPeerlender–thiscompanyhasnowobtainedgovernmentsupportfortheirlendingstrategyandcanofferloansatlowerratesthanourcriteria,sothistrancheisinrun-off.Wehavealreadyreflectedasignificantwrite-downoftheseassetsintheNAV,sothisexposureisnowdeminimusat0.7%oftheFund’stotalassetbase.However,wehavetwoSpanishspeakingcolleagueswhoengageonabi-weeklybasiswiththemandhaveaquietconfidencethatwewillbeabletorecoversomeofthesewrite-downstothebenefitoftheCompany.ThroughouttheprocessofrestructuringtheFund’sportfolio,thepeertopeerexposurehasbeenthebiggesttestandthegreatestdrawonresourcewhencomparedtothesizeoftheloansandexpectedreturn.


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IFRS9SinceJuly2018, theCompanyhasadoptedan IFRS9methodologytoprovide informationregardingforwardexpectationsofimpairment.Thiswasachangeintheaccountingpolicywherebyloanspreviouslyhadanimpairmentassignedtothemreflectingcurrentinformationonly.ThisisanewaccountingstandardandhasbeenopentointerpretationbypeersandbyotherlendersandsowewillprovideadescriptionofourownmethodsinthisregardintheCompany’sReportandAccounts for yearend June2019. Fornow,weshall focuson thechangeswehavemadetothepercentageprovisioningfortheriskierPlatforminvestmentsintheportfolio.InJuly2018,theCompanychosetodistinguishbetweenSQN’sdirectloansandlegacyplatformloans,makingahigheraverageportfolioprovisionforlegacypositions.Theratesofimpairmentwereasfollows: ProbabilityofDefault(Platforms)Stage1 2%Stage2 15%Stage3 25%Asaresultoftakingtheaverageimpairmentpositionforthewholeplatformsegment,theoverallIFRS9provisiondroppedfrom1.36%to0.42%asreportedinanRNSinJuly2018.Oneyearon,wehaverevisitedthisapproachandhaverevisedtherangeofprovisioningallocatedtolegacyloansasfollowsandhavenowtakenaccountofexplicitriskstoindividualloans: ProbabilityofDefault(Platforms)Stage1 2%Stage2 15%-100%Stage3 25%-100%ThiswillmeanthatShareholdersshouldexpectanincreaseintheIFRS9provisioningmadebythemanageroverthecomingmonths.ThisincreaseissolelyattributabletotheUKandUSpeertopeerlenderswhichrepresentc.7%oftheFund’sassetbase.Thereasonsforthischangeareasfollows:

• Theplatformsarenolongerunderwritingnewbusinessandaretreatingtheseloansaslegacyportfoliopositionsthemselves.Thishasresultedinadiminishedattentiontothetaskofcollectionsresultinginaslowerrecoupofloancapital.

• As the legacy portfolio becomes a smaller percentage of the total portfolio, theimpaired loans will represent a greater proportion in percentage terms of theremainder. Over the past year, the total proportion of the Company’s asset baseinvestedinplatformloanshasreducedfrom53.6%to28.2%.

• Therehavebeensomesignificantchangesinownershipandfocusofthebusinessesinthelegacyportfoliothathasincreasedrisktothecapitaldeployed.


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• OneoftheplatformswasinsalenegotiationsandwasatanadvancedstageinDueDiligencethatwouldhavemeantastabilisationoftheoutlookfortheassets. Thiscorporateactionhasnowbeenplacedonhold.

So,despitereducingtheoverallexposureinplatformsto28.2%oftheoverallportfolio,weconsideritprudenttoreflectthesechangesinconditionsastheynowpresentthemselvesandhaveadoptedamethodologythatreflectsthesespecificcircumstances.Evenwiththeseimpairmentprovisions,dividendcoverremainsconsistentandwehaveconfidencethat8%totalreturnontheportfoliointhemediumtermisachievable.InvestmentOutlookAfteratroubledstart,SQNassumedmanagementoftheSecuredIncomeFundinApril2017.Sincethen,theCompanyhasstabilisedandisnowdeliveringsteadydividendcoverandthenetassetvaluehasreflectedthecarefulmanagementofdirectloansandlegacythirdpartyinvestments.Asweconsiderrisks,asdemonstratedinourcandidassessmentabove,SQNhascarefullymanaged the relationshipswith legacycounterpartiesbutas thispartof theportfoliomatures,itisunsurprisingthattheremainderwillrepresentasignificantchallenge.Withoutfurthershareholdercapitalandwithoutanadjustmenttotheinvestmentmandate,whilst we will be able tomaintain dividend cover it will be a challenge tomake furtherimprovements in NAV, nor will we be able to control the potential negative impact ofimpairments from legacy investmentsas theownersof thesebusinesses try towalkawayfromtheirresponsibilities.Wehavealwaysadvisedthatthebestwaytomanagetheserisksistogrowtheassetstodiminishthisimpact.ContinuationVoteCurrentmarketconditionsandlegacyexposuretoanout-of-favourinvestmentstrategyhaveresultedintheinabilitytoattractsubstantialnewcapitalintotheCompany.Underthetermsoftheprospectus,theCompanywillbesubjecttoaContinuationVotein2020ifithasnotreached£250millionintotalassetsbyyearend.Giventhatthisisnowunlikely,therearethreepathsforward:

• TheInvestmentManagerwouldcontinuerunningtheportfoliowithdividendcoverata sustainable level and reinvest run-off proceeds into SQN originated loans thatprovidesteadyandlow-riskincome.

• Secondly,theBoardcanpresentinvestorswithawinddownplanthatwilllikelytaketwoorthreeyearstoexecutewiththeobjectiveofdeliveringinvestorstotalproceedsasclosetoNAVaspossiblelesstheunavoidableexpensesrequiredintheprocess.

• The third option is for the introduction of a change in strategy, whereby theInvestmentManager hasmade a proposal to the Board, that is being considered,whichshouldreturninvestorcapitalinaquickertimeframewithmorecertaintyintheoverallreturnsandwehaveembarkedonaprocessoftestmarketingwithexistingShareholderstogaugesupportforthiswayforward.


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SomerstonShareholdingAs investorsareaware,theconversionoftheSMELoanFundtotheSQNSecuredIncomeFundwasaccomplishedwithcooperationofthelargestshareholder,SomerstonGroup.Aspart of the take-over and restructuring, Somerston agreed to hold its positionwhile SQNraisedadditionalcapitalandfacilitatedgreater liquidityforthebenefitofallshareholders.SQNisscheduledtomeetwithSomerstoninhopesofreachingamutuallyagreeablepathforward.ConclusionWiththecontinuationvoteapproaching,wewillbeengagingwithShareholderstoagreeasuitablewayforward.SQNhasahighdegreeofconfidencethatithas,notonlyastructurebut,most importantly,an identifiednewinvestorbasecapableofproviding liquiditytoallinvestors at attractive levels. SQN believes that it can execute its strategy with thecooperationofourShareholdersandlooksforwardtothisdialogueoverthecomingweeks.Expectationsarethatasolutionthatbenefitsallpartiesislikelytocometogetherbeforethecontinuationvote.SQNAssetManagementOctober7th,2019.

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