PHH shareholder Pennant Capital seeks two board seats on June 10

By Lisa Kerner

Charlotte, N.C., May 19 - Pennant Capital said it sent a letter to fellow PHH Corp. shareholders on Tuesday asking them to support the election of Pennant nominees Allan Loren and Greg Parseghian to PHH's board on June 10.

Loren is the former chairman of Dun & Bradstreet Corp., and Parseghian is the former chief executive officer of Freddie Mac, according to Pennant.

In the letter, Pennant said it is opposing two of PHH's three nominees: chairman A.B. Krongard and CEO Terence Edwards.

Krongard and Edwards are up for re-election to new three-year terms at the annual meeting.

Pennant, a 9.94% shareholder, believes that PHH, under the leadership of Krongard and Edwards, has been poorly managed.

PHH must, according to Pennant:

• Build a more flexible cost structure targeted for profitability in all environments;

• Establish compensation arrangements that base management incentives on factors that are within management's control;

• Fully evaluate the profitability of each existing and potential client contract, with a view toward profitable growth; and

• Understand and publicly articulate the normalized earnings power of PHH.

Pennant also expressed concern about PHH's ability to refinance its unsecured credit facility that comes due in approximately 18 months.

According to Pennant, there is nearly $1 billion drawn on the facility as of March 31.

PHH is an outsource provider of mortgage and vehicle fleet management services based in Mt. Laurel, N.J.

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