MoneyGram Gets $710 Million Aid
(Digital Money World) MoneyGram, one of the big boys in the money transmitting business has been toiled down with turmoils after the subprime meltdown. With its share priced halved, MoneyGram posted a $571 million net loss last September.
The negotiations of partial buyout amounting to $710 million from Thomas H. Lee Partners were successful, and also another huge investment profile leader, Goldman Sachs joins in the rescue plan.
The Investors, which include affiliates of THL and affiliates of Goldman Sachs are expected to make an equity investment of approximately $710 million (with a maximum amount of $775 million), with the exact amount to be determined by the price at which the Company is able to sell certain investment portfolio assets as required under the terms of the agreement.
The Company has also entered into an agreement with affiliates of Goldman Sachs to provide debt financing of up to $500 million and the Company is expected to obtain an additional $200 million in debt financing prior to the close of the transaction.
The Company also expects to have $350 million outstanding or available under its existing credit agreement, and will seek amendments from its existing lenders to modify certain terms and to permit those amounts to remain outstanding or available.
The Company also announced a multi-year extension through January 2013 of its financial services agreement with Wal-Mart. MoneyGram provides the money transfer, urgent bill payment and money order services for customers in more than 3,500 Wal-Mart stores, including Wal-Mart MoneyCenters. The Company’s multi-year extension with Wal-Mart is conditioned on the consummation of the transaction. (more on AllPayNews)
The biggest competitor to MoneyGram in terms of services offered would be Western Union, which is much bigger in terms of operations.
Tags: Goldman Sachs, MoneyGram, Thomas H. Lee, western-UnionRelated Stories
POSTED IN: MoneyGram
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