Thursday, December 17, 2015 2:13:57 AM
http://finance.yahoo.com/mbview/userview/;_ylt=Anx9aCBeJOurhxzHafgnmaneAohG;_ylu=X3oDMTB2ODlnNzgyBHBvcwMyMQRzZWMDTWVkaWFNc2dCb2FyZHNYSFJVbHQ-;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3?&u=bopfan&bn=e4f35af6-c762-3ab2-a071-1fb6ae6c7fd5&f=0
bopfan • 59 minutes ago
You've got it backwards. Today WMIH is WMIIC's parent. I'm saying they will reverse roles; WMIIC will acquire 80% of WMIH's presently unissued stock. WMIIC itself will remain a private corporation and will be owned by the LT and KKR. The split of WMIIC's stock will be at least 80% in the LT's favor and at most KKR's 20%. LT interest holders can't sell their LT interests so they can't sell the WMIH stock the LT will hold in WMIIC.
As for the WMIIC to WMI loans, if you go to the LT's website you can find the 8-K filing that (filed on 3/31/12, I believe) that sets forth the $565MM intercompany receivable WMIIC held against WMI when the two filed Chapter 11. If you go to the LT's website and look under FAQ section you'll see in Section 2(e) that it clearly states it owns WMIIC's intercompany obligations. At the end of the bankruptcies those obligations were at least $811MM and will have accrued interest since then. As you know, WMIH's market cap is about $535MM right now, so there's no way it can meet its obligation, but once its stock rises the LT can press its claim. It won't ask for cash, it'll demand stock as that is much more valuable, and will leave just enough for WMIH to make certain small acquisitions and to award more shares to the BOD, of course.
bopfan • 2 hours 41 minutes ago
WMIIC belongs to WMIH. It's WMIH's wholly-owned subsidiary. WMIIC owned the $811MM and if WMIIC had been consolidated with WMIH the $811MM (+ interest) would have been lost. The LT got it somehow and can use it as currency. KKR has no escrows so it can't own a piece of the LT. However, if $ flowing up to the LT flows through a corporation in which KKR has an interest then KKR gets some of what would have gone to the LT. If $ from WMIH upstreams to WMIIC and 80% of WMIIC is owned by the LT and 20% is owned by KKR (and, probably, others) then that answers the problem of KKR not having escrows.
Further, if WMIIC holds 2.8B shares (WMIH is authorized to issue 3.5B shares and about 550 have been issued) and the LT owns 80% of WMIIC then the LT effectively owns 2.52B new shares. Those shares will be reflected through LT interests to LT escrow holders thus: 2.52B/200MM (200MM shares were originally issued) such that whatever allotment a LT escrow holder got in WMIH shares would be multiplied by 12.6. For example, if you released 1,000 Ps you got 20K WMIH shares in 2012. This go round the value of your LT escrows would increase by 252K shares. You would own the shares indirectly through your LT escrows. A K holder who released 10,000 Ks would have received 4,950 WMIH shares, so he/she would own an additional 62.370Ks indirectly through his LT interest. Finally, someone who released 100K commons (i.e., Qs; Mike Willingham released 1MM Qs) got 3,300 Qs. The former Q owner would get an additional 41.58K WMIH common (3.3K x 12.6). Once again, these shares would be controlled by the LT, but the value would inure to the LT holders. If WMIH goes to $20 under this scenario the person who released 1K Ps would see his LTs rise in value by $5.04MM. Some people bought Ps for under $2 and if that person did he'd see a $2K investment in '08 or '09 bring him in over $5MM.
I also anticipate the BOD will vote itself more shares with each M&A or capitalization event. Less
bopfan • 6 hours ago
I don't read this board very often; the inmates took hold of the asylum long ago. I'm expecting a small acquisition and some capitalization to get the market cap to about $2.5B. I think that's a critical number for the liquidation trust to enforce its debt (it obtained it from WMI Invesment Corp. (aka 'WMIIC')). I think that debt will be used as currency for the about 2.8B shares of WMIH which will wind up in WMIIC. As the LT cannot own stock in a public company it will own stock (up to 80%) of WMIIC. This will make the LT interests enormously valuable and that's not including the FDIC cash and illiquid asets. All my own opinion, of course, but WMIIC lent WMI about $811MM ($565MM before the Chapter 11 case and about $223MM so WMI could exit bankruptcy PLUS another $22MM in tax refunds). It appears that upon exit from Chapter 11 that debt was given to the LT. Interesting. I don't think the LT will get all of WMIIC; KKR will get a stake, I expect, and possibly others. Good luck to all of us with escrows in addition to our WMIH holdings. Holding WMIH is a fantastic play but the legacy interests (i.e., escrows/LTIs) of those who signed their releases is truly extraordinary. Less
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