| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers P > Headlines for PHH Corp. > News item |
Financing could jeopardize PHH merger; stockholders set to vote on Sept. 26
By Lisa Kerner
Charlotte, N.C., Sept. 17 - A financing shortfall of some $750 million may affect the planned merger of PHH Corp. with General Electric Capital Corp. and Jade Merger Sub, Inc.
GECC planned to sell the mortgage business to Blackstone Group affiliate Pearl Mortgage Acquisition 2 LLC. However, JPMorgan Chase, NA, J.P. Morgan Securities Inc., Lehman Commercial Paper Inc., Lehman Brothers Inc. and Lehman Brothers Commercial Bank revised their "interpretations" as to the availability of debt financing under the debt commitment letter provided to Pearl Mortgage on March 15.
The revised interpretations could result in a $750 million financing shortfall, according to a company news release. PHH also notified its shareholders of possible changes to the financing.
Pearl Mortgage intends to continue its efforts to obtain the debt financing under the debt commitment letter as well as explore other debt financing options.
PHH expects GECC to fulfill its obligations under the merger agreement.
A special meeting will be held at 10 a.m. ET on Sept. 26 where shareholders will be asked to vote on the merger deal. The record date for the meeting is Aug. 16.
On March 15, GECC entered into a definitive agreement to acquire PHH in an all-cash transaction for $31.50 per share, or approximately $1.8 billion.
PHH's board of directors unanimously approved the deal to take the company private and recommended its stockholders do the same.
It was previously reported that GECC agreed to sell the mortgage operations of PHH to the Blackstone affiliate and to retain the PHH Arval fleet management services portion of the business.
PHH is a Mount Laurel, N.J., outsource provider of mortgage and vehicle fleet management services.
Danbury, Conn.-based GE Capital Solutions provides leasing, lending and capital investment products and services.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.