News for 'WMIH' - (WMI Holdings Corp. Announces Commitment by KKR for Strategic Investment Parties Enter into Conditional Commitment Letter for KKR to Acquire Subordinated Debt, Convertible Preferred Stock and Warrants)
SEATTLE, Dec. 9, 2013 /PRNewswire via COMTEX/ -- WMI Holdings Corp. (OTC: WMIH)
("WMI" or the "Company") today announced that KKR & Co. L.P. has entered into a
conditional commitment letter to make a strategic investment in the Company (the
"Commitment Letter"), dated December 8, 2013.
Subject to the completion of definitive documentation, due diligence and the
terms and conditions of the Commitment Letter, KKR has agreed (i) to purchase
approximately $10.55 million face amount of convertible preferred stock of the
Company at a price per share of $1.10 convertible on a one-for-one basis into
shares of common stock of the Company (the "Convertible Preferred Stock"), and
(ii) commit to purchase up to $150 million aggregate principal amount of
subordinated 7.5% PIK notes, which may be issued in one or more tranches over a
three year period, each with a seven year term from the date of initial issuance
(the "Subordinated Notes"), subject to certain terms and conditions.
Substantially all of the proceeds from the Subordinated Notes, if and when
issued, would be used by the Company to fund future acquisitions. Upon
consummation of the transactions contemplated by the Commitment Letter, KKR
would receive five-year warrants to purchase approximately 61.4 million shares
of the Company's common stock, 30.7 million of which would have an exercise
price of $1.32 per share and 30.7 million of which would have an exercise price
of $1.43 per share. KKR would also have the right for three years to participate
up to 50% in equity offerings up to an aggregate of $1 Billion by the Company
subject to certain limitations, including a cap in ownership by KKR (and its
affiliates) of 42.5% of the Company's common equity. The Convertible Preferred
Stock, if and when issued, will include the right for KKR to appoint one of
seven members to the board of directors of the Company. The Commitment Letter
terminates on January 31, 2014 in the event that the parties do not enter into
definitive documentation on or before such date. The Company has agreed to
reimburse KKR for certain expenses incurred by it in connection with the
Commitment Letter and has also agreed in certain circumstances to pay KKR a
termination fee equal to $2 million.
Michael Willingham, Chairman of the Company said, "We believe this investment
from KKR will provide WMI Holdings with a compelling opportunity to create
meaningful shareholder value. KKR has a global network of relationships, deep
expertise in transaction execution, portfolio management, capital-raising, and
operational improvement, and we believe a partner with these capabilities will
augment our ability to execute on our stated acquisition strategy."
Tagar Olson, Member and Head of KKR's Financial Services team stated, "As a firm
that invests across a wide range of asset classes, we think KKR is
well-positioned to serve as a long-term aligned capital partner to the Company.
We are looking forward to being a strategic investor in WMI as the Company grows
and diversifies its platform in the coming years. We believe there is a
compelling opportunity to help build shareholder value as a significant investor
alongside WMI's existing shareholders."
Blackstone Advisory Partners L.P. is acting as financial advisor to the Company
in connection with the transactions contemplated by the Commitment Letter. Akin
Gump Strauss Hauer & Feld LLP and Lane Powell PC are counsel to the Company.
Simpson Thacher & Bartlett LLP is counsel to KKR.
About WMI Holdings
WMI Holdings Corp., formerly Washington Mutual, Inc., consists primarily of WM
Mortgage Reinsurance Company, Inc. ("WMMRC"), a wholly owned subsidiary of the
Company that is domiciled in Hawaii. The Company's primary business is a legacy
reinsurance business that is currently operated in runoff mode by WMMRC.
About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading
global investment firm with $90.2 billion in assets under management as of
September 30, 2013. With offices around the world, KKR manages assets through a
variety of investment funds and accounts covering multiple asset classes. KKR
seeks to create value by bringing operational expertise to its portfolio
companies and through active oversight and monitoring of its investments. KKR
complements its investment expertise and strengthens interactions with fund
investors through its client relationships and capital markets platform. KKR &
Co. L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR) and
"KKR", as used in this release, includes its subsidiaries, their managed
investment funds and accounts, and/or their affiliated investment vehicles, as
appropriate.
