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
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.
Uponconsummation 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 theright for three
years to participate up to 50% inequity 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
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
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.
Contact: Andrew Siegel / Aaron Palash / Jed Repko, Joele Frank, Wilkinson
Brimmer Katcher, (212) 355-4449
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