CompuCredit Holdings Corporation Announces Dividend and Plan to Spin-Off U.S. and U.K. Micro-Loan Businesses
December 03 2009 - 10:45AM
Marketwired
CompuCredit Holdings Corporation (NASDAQ: CCRT) today announced
that its Board of Directors has declared a dividend of $.50 per
share payable to holders of record as of the close of trading on
December 31, 2009. The dividend will be paid on or after December
31, 2009, but not later than February 28, 2010. The Board of
Directors also is evaluating the declaration of additional cash
dividends in the future. The payment of this cash dividend will
entitle holders of the Company's convertible notes to convert their
notes and receive, using an assumed December 2, 2009 closing
trading price of the Company's stock, either approximately $74.79
or approximately $61.46 for each $1,000 face amount of notes,
depending upon which series is held. The actual conversion prices
will depend, however, upon the trading price of the Company's stock
during the applicable measurement periods provided for in the
indentures governing the notes and any other changes in the
conversion prices in the interim.
The Company also announced that it is considering a tax-free
spin-off of its U.S. and U.K. micro-loan businesses into a
publicly-traded company called Purpose Financial Holdings, Inc. The
Company expects that Purpose Financial will file a Form 10
Registration Statement with the Securities and Exchange Commission
in connection with this potential spin-off. Prior to the completion
of the spin-off transaction, CompuCredit's Board of Directors would
have to formally approve the spin-off distribution, and there is no
certainty at this time that the spin-off actually will occur.
Should the spin-off occur, it also is anticipated that Purpose
Financial would apply to list its common stock on NASDAQ.
The spin-off would create two stand-alone, publicly-traded
companies: (i) CompuCredit: a provider of credit and related
financial services and products to the "sub-prime" credit market;
and (ii) Purpose Financial: a micro-loan finance company primarily
engaged in the business of marketing, servicing and/or originating
small-balance, short-term loans through a network of 316 retail
branch locations in Alabama, Colorado, Kentucky, Mississippi, Ohio,
Oklahoma, South Carolina, Tennessee, and Wisconsin and via the
Internet in both the U.S. and the U.K. The businesses to be
evaluated for spin-off had revenues of approximately $98.4 million
and $107.2 million for the nine months ended September 30, 2009 and
year ended December 31, 2008, respectively.
Chairman and CEO of CompuCredit, David G. Hanna, said, "The
spin-off of CompuCredit's micro-loan businesses could represent a
significant opportunity for the boards, management teams and
shareholders of both companies. A spin-off would enable the
management and boards of both CompuCredit and Purpose Financial to
have a sharper focus on their core businesses. Additionally, as two
stand-alone entities with sound operations and talented management
teams, both companies could be better positioned to manage and grow
their businesses, leverage their distinct competitive strengths,
attract and retain key employees and pursue value-creation
opportunities over the long-term." Mr. Hanna continued, "We expect
to file the necessary documents with the SEC shortly, and once the
SEC review process is concluded, the Company's Board of Directors
will make a final determination as to whether to complete the
spin-off."
About CompuCredit
CompuCredit is a specialty finance company and marketer of
branded credit cards and related financial services. CompuCredit
provides these services to consumers who are underserved by
traditional financial institutions. Through corporate and affinity
contributions focused on the underserved and un-banked communities,
CompuCredit also uses its financial resources and volunteer efforts
to address the numerous challenges affecting its customers. For
more information about CompuCredit, visit www.CompuCredit.com.
Forward-Looking Statements
Certain statements in this press release, including statements
regarding, without limitation, the payment of the cash dividend,
the payment of additional cash dividends, the completion of the
spin-off of our micro-loan businesses, the filing of a Form 10
Registration Statement with the SEC, the filing of a NASDAQ listing
application for Purpose Financial and the ability to list Purpose
Financial's common stock on NASDAQ, may be forward-looking in
nature or "forward-looking statements," as defined by the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks and uncertainties,
including, but not limited to, a determination by the IRS that the
spin-off should be treated as a taxable transaction, our ability to
complete the SEC review process, and our ability to complete the
NASDAQ listing process, that may cause actual results to be
materially different from those described in such forward-looking
statements. Certain of these risks and uncertainties are or will be
described in greater detail in CompuCredit's filings with the SEC
and in Purpose Financial's Form 10 that it plans to file with the
SEC. These forward-looking statements are based on CompuCredit's
current expectations and beliefs concerning future developments and
their potential effects on CompuCredit. There can be no assurance
that future developments affecting CompuCredit or Purpose Financial
will be those anticipated by CompuCredit. CompuCredit undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
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