SEATTLE, Dec. 9, 2013 /PRNewswire/ -- 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.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934. All statements other than
statements of historical fact included in this report that address
activities, events, conditions or developments that we expect,
believe or anticipate will or may occur in the future are
forward-looking statements. Forward-looking statements give our
current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future
performance and business and these statements are not guarantees of
future performance. These statements can be identified by the fact
that they do not relate strictly to historical or current facts.
Forward-looking statements may include the words "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe,"
"strategy," "future," "opportunity," "may," "should," "will,"
"would," "will be," "will continue," "will likely result," and
similar expressions. Such forward-looking statements involve risks
and uncertainties that may cause actual events, results or
performance to differ materially from those indicated by such
statements. These risks are identified and discussed in the
Company's Form 10-K for the year ended December 31, 2012 under Risk Factors in Part I,
Item 1A. These risk factors will be important to consider in
determining future results and should be reviewed in their
entirety. These forward-looking statements are expressed in good
faith and we believe there is a reasonable basis for them. However,
there can be no assurance that the events, results or trends
identified in these forward-looking statements will occur or be
achieved. Forward-looking statements speak only as of the date they
are made, and we do not undertake to update any forward-looking
statement, except as required by law. Readers should carefully
review the statements set forth in the reports, which the Company
has filed or will file from time to time with the Securities and
Exchange Commission.
SOURCE WMI Holdings Corp.