Och-Ziff Capital Management Group LLC (NYSE: OZM) climbed Friday morning after the company announced a play to pay down debt in order to de-leverage.
CEO Robert Shafir said, "We believe the suite of strategic actions we are announcing today solidifies Oz’s future, providing long-term stability and setting the firm on a path for continued success. By materially increasing equity ownership by the current partners and taking steps to enhance our capital structure, we expect to be better positioned to serve our clients."
As part of the plan, Chairman Daniel Och and the other holders of Class A Units in the Company's operating partnerships will collectively reallocate 35% of their Class A Units to current executive managing directors in the form of a new class of interests entitling holders to future profits and gains.
The Class E Units related to this reallocation will fully vest over a multi-year period to ensure the stability and commitment of the Company’s key senior investment professionals and senior leadership.
In addition, the holders of the Existing Preferred will forfeit 7.5 million of their Class A Units which will be reallocated. In conjunction with the foregoing, certain key executive managing directors are expected to enter into certain arrangements with the Company, which will include a reduction in current annual compensation.
Following the close of trading on the New York Stock Exchange on January 3, 2019, it is expected that Oz will effect a one for 10 reverse stock split of its Class A Shares.
OZM shares began the week’s last session up six cents, or 5%, to $1.26
