DALLAS, July 28, 2020 /PRNewswire/ -- MoneyGram
International, Inc. (NASDAQ: MGI) ("MoneyGram" or the
"Company"), a global leader in cross-border P2P payments and
money transfers, announced today that its Board of Directors (the
"Board") has adopted a Tax Benefits Preservation Plan
(the "Plan") designed to protect and preserve the
Company's existing U.S. federal net operating loss carryforwards
("NOLs"), U.S. federal tax credit carryforwards and other
tax attributes (collectively, the "Tax Attributes"), which
can potentially be utilized in certain circumstances to offset the
Company's future U.S. federal income tax obligations. As of
December 31, 2019, the Company had
estimated U.S. federal NOLs of approximately $45.4 million that could be available to offset
its future U.S. federal taxable income. In addition, as of
December 31, 2019, the Company had
estimated U.S. federal tax credit carryforwards of approximately
$12.9 million that could be available
to reduce its U.S. federal income tax.
The Board adopted the Plan to protect the Company's Tax
Attributes from potentially decreasing in value upon certain
ownership changes involving "5% shareholders," as defined under
Section 382 of the Internal Revenue Code (the "Code").
The Plan is similar to tax benefit preservation plans adopted by
other publicly-held companies with NOLs or other tax attributes
that they wish to preserve and has a limited duration of three
years.
The Company's ability to use its Tax Attributes would be
substantially limited if it were to experience an "ownership
change," as defined under Section 382 of the Code. A corporation
generally will experience an ownership change if the percentage of
the corporation's stock owned by one or more 5% shareholders
increases by more than 50 percentage points over their lowest
ownership percentage within a rolling three-year period. The Plan
reduces the likelihood that changes in the Company's investor base
would limit the Company's future use of its Tax Attributes, which
could permanently impair the value of such Tax Attributes. The
Company believes that no ownership change under Section 382 has
occurred as of the date of this press release.
To implement the Plan, the Board declared a dividend of one
preferred share purchase right (a "Right") for each
outstanding share of the Company's common stock. The Rights will be
issued to stockholders of record at the close of business on
August 7, 2020 pursuant to the Tax
Benefits Preservation Plan (the "Rights Agreement")
dated July 28, 2020, by and between the Company and Equiniti
Trust Company, as Rights Agent. The Rights will be exercisable if a
person or group of persons acquires 4.95% or more of the Company
Stock (as defined in the Rights Agreement to include outstanding
Company common stock, the Series D Participating Convertible
Preferred, the Second Lien Warrants and the Ripple Warrants). The
Rights will also be exercisable if a person or group of persons
that already owns 4.95% or more of the Company Stock acquires an
additional share (other than as a result of a dividend or a stock
split). Existing stockholders that beneficially own in excess of
4.95% of the Company Stock will be "grandfathered in" at their
current ownership level. If the Rights become exercisable, all
holders of Rights, other than the person or group of persons
triggering the Rights, will be entitled to purchase shares of the
Company's common stock at a 50% discount. Rights held by the person
or group of persons triggering the Rights will become void and will
not be exercisable.
The distribution of the Rights should not be taxable to the
Company's stockholders. The Rights will trade with the Company's
common stock and will expire at the close of business on
July 28, 2023. The Rights will expire
under other circumstances as described in the Rights Agreement,
including on the date set by the Board following a determination
that the Plan is no longer necessary or desirable for the
preservation of the Tax Attributes or no Tax Attributes are
available to be carried forward or are otherwise available. The
Board may terminate the Plan prior to the time the Rights are
triggered or may redeem the Rights prior to the Distribution Date,
as defined in the Rights Agreement.
Additional information with respect to the Plan and the related
Rights will be contained in a Current Report on Form 8-K that the
Company will file with the Securities and Exchange Commission
("SEC"). The Rights issued in the Plan are issued pursuant
to the Rights Agreement, a copy of which will be filed as an
exhibit to the Current Report on Form 8-K. For more information
regarding the Company's Tax Attributes, please refer to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2019.
About MoneyGram International, Inc.
MoneyGram is a global leader in cross-border P2P payments and
money transfers. Its consumer-centric capabilities enable family
and friends to quickly and affordably send money in more than 200
countries and territories, with over 70 countries now digitally
enabled.
MoneyGram leverages its modern, mobile, and API-driven platform
and collaborates with the world's leading brands to serve millions
of people each year through both its walk-in business and its
direct-to-consumer digital business.
With a strong culture of innovation and a relentless focus on
utilizing technology to deliver the world's best customer
experience, MoneyGram is leading the evolution of digital P2P
payments.
For more information, please visit MoneyGram.com and follow
@MoneyGram.
Forward-Looking Statements
This communication contains forward-looking statements which are
protected as forward-looking statements under the Private
Securities Litigation Reform Act of 1995 that are not limited to
historical facts, but reflect MoneyGram's current beliefs,
expectations or intentions regarding future events. Words such as
"may," "will," "could," "should," "expect," "plan," "project,"
"intend," "anticipate," "believe," "estimate," "predict,"
"potential," "pursuant," "target," "continue," and similar
expressions are intended to identify such forward-looking
statements. The statements in this communication that are not
historical statements are forward-looking statements within the
meaning of the federal securities laws. Specific forward-looking
statements include, among others, statements regarding the
company's projected results of operations, specific factors
expected to impact the company's results of operations, and the
expected restructuring and reorganization program results.
Forward-looking statements are subject to numerous risks and
uncertainties, many of which are beyond MoneyGram's control, which
could cause actual results to differ materially from the results
expressed or implied by the statements.
These risks and uncertainties include, but are not limited
to:
- the impact of the COVID-19 outbreak or future epidemics on our
business, including the potential for work stoppages, lockdowns,
shelter-in-place, or restricted movement guidelines, service
delays, lower consumer and commercial activity;
- our ability to compete effectively;
- our ability to maintain key agent or biller relationships, or a
reduction in business or transaction volume from these
relationships, including our largest agent, Walmart, whether
through the introduction by Walmart of additional competing "white
label" branded money transfer products or otherwise;
- our ability to manage fraud risks from consumers or
agents;
- the ability of us and our agents to comply with U.S. and
international laws and regulations;
- litigation or investigations involving us or our agents;
- uncertainties relating to compliance with the Amendment to and
Extension of Deferred Prosecution Agreement (the "Amended
DPA") entered into with the U.S. federal government and the
effect of the Amended DPA on our reputation and business and our
ability to make payments required under the Amended DPA;
- regulations addressing consumer privacy, data use and
security;
- our ability to successfully develop and timely introduce new
and enhanced products and services and our investments in new
products, services or infrastructure changes;
- our ability to manage risks associated with our international
sales and operations;
- our offering of money transfer services through agents in
regions that are politically volatile;
- changes in tax laws or an unfavorable outcome with respect to
the audit of our tax returns or tax positions, or a failure by us
to establish adequate reserves for tax events;
- our substantial debt service obligations, significant debt
covenant requirements and credit ratings;
- major bank failure or sustained financial market illiquidity,
or illiquidity at our clearing, cash management and custodial
financial institutions;
- the ability of us and our agents to maintain adequate banking
relationships;
- a security or privacy breach in systems, networks or databases
on which we rely and disruptions to our computer network systems
and data centers;
- weakness in economic conditions, in both the U.S. and global
markets;
- a significant change, material slow down or complete disruption
of international migration patterns;
- the financial health of certain European countries or the
secession of a country from the European Union;
- our ability to manage credit risks from our agents and official
check financial institution consumers;
- our ability to adequately protect our brand and intellectual
property rights and to avoid infringing on the rights of
others;
- our ability to manage risks related to the operation of retail
locations and the acquisition or start-up of businesses;
- any restructuring actions and cost reduction initiatives that
we undertake may not deliver the expected results and these actions
may adversely affect our business;
- our capital structure;
- and uncertainties described in the "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of MoneyGram's public reports filed
with the SEC, including MoneyGram's Annual Report on Form 10-K for
the year ended December 31, 2019 and
Quarterly Reports on Form 10-Q filed thereafter.
Additional information concerning factors that could cause
actual results to differ materially from those in the
forward-looking statements is contained from time to time in
MoneyGram's SEC filings. MoneyGram's SEC filings may be obtained by
contacting MoneyGram, through MoneyGram's website at
ir.moneygram.com or through the SEC's Electronic Data Gathering and
Analysis Retrieval System ("EDGAR") at http://www.sec.gov.
MoneyGram undertakes no obligation to publicly update or revise any
forward-looking statement.
Contact
Stephen Reiff
media@moneygram.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/moneygram-adopts-tax-benefits-preservation-plan-to-protect-tax-attributes-301101594.html
SOURCE MoneyGram