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MoneyGram Considering Strategic Options Including Sale: Reuters

MoneyGram Considering Strategic Options Including Sale: Reuters
According to a report by news agency Reuters citing sources, strategic alternative – that also includes the sale of the company, is being considered by MoneyGram International Inc. About a year ago, the company’s plans to sell itself off to a Chinese firm for $1.2 billion was scuttled by the US government. 
Since the collapse of the deal of the Dallas-based company with the Chinese firm Ant Financial in January 2018, the shares of the company have dropped by almost 83 per cent. The US regulators also slapped a $125 million financial penalty on the company in November last year over charges that it had not been able to prevent fraudulent money transfers.
After the report of the possible sale of the company was published on Friday by Reuters, there was a 10.6 per cent uptick in the shares of the company at $2.29 amounting to a market capitalisation of $127.4 million.
The debt pile of the company at $902.8 million as of the end of September and which has to be repaid in September this year are also being considered to be restructured according to the report. More than $80 million from an undrawn credit line is available for the company.
Globally, the company employs over 2900 people and has cash of about $200 million at the end of September and has private-equity firm Thomas H. Lee Partners LP as its largest shareholder.
According to the report, addressing a covenant tied to its credit line is the initial focus of the debt restructuring efforts at MoneyGram. Sources also added that that company is trying to push out the deadline that it faces to March and there by five itself more time to meet the terms of that covenant.
The sources also added that the company also wants to increase the time period for the maturity of its about $900 million loan. The sources further said that if no immediate action on those debts is taken now, they would become “current” very soon in terms of accounting and could potentially stir concerns among creditors and shareholders of MoneyGram.
There were no comments made by a spokeswoman for MoneyGram. The company currently has agents in about 350,000 outlets in over 00 countries and territories.
According to the report, MoneyGram’s chairman and chief executive, Alex Holmes, had been attempted to be contacted by Wall Street restructuring advisers but without any response from the company.
Holmes had said in November, “We always entertain discussions,” while replying to a question from an analyst about whet the company looking out for a buyer.
The company has also had to face its shares being rated “junk”. It is also contemplating generating additional finances from preferred equity which would be placed over and above those of the shareholders bit be lower than lenders when it comes to repayment in a restructuring.

Christopher J. Mitchell

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