Altisource Announces Sale of Property Management Resources to Front Yard Residential Corporation
09 Août 2018 - 1:57PM
Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”)
(NASDAQ: ASPS) today announced the sale of certain property
management resources to Front Yard Residential Corporation (“Front
Yard”) (NYSE:RESI) in accordance with the following key terms:
- Front Yard will make an upfront payment of $15 million to
Altisource with an additional $3 million to be paid upon the
earlier of (1) five years, or (2) a Change of Control of Front
Yard.
- Altisource will continue to provide the following services to
Front Yard on an exclusive basis:
- Title insurance and escrow services for a period of four
years;
- Auction, real estate brokerage, and preservation services on
Front Yard’s remaining legacy REO portfolio; and
- Asset Management services on approximately 150 rental assets
identified by Front Yard for disposition.
- Altisource will support the transition of property management
services to Front Yard’s internal property manager until December
31, 2018, which may be extended by up to 90 days.
- Altisource will be restricted from selling its shares in Front
Yard until December 31, 2018. Thereafter, Altisource will be
permitted to sell in accordance with the share disposition schedule
described in the Omnibus Amendment. Notwithstanding these
restrictions, Altisource is permitted to sell shares under certain
circumstances, including (a) to meet liquidity requirements, (b) to
finance acquisitions, (c) for block transactions, or (d) a Change
of Control of Front Yard.
Altisource expects to recognize a gain from this transaction in
the third quarter of 2018 and intends to use the $15 million in
initial cash proceeds from this transaction to repay its senior
term loan.
Additional details regarding the transaction are included in the
Company’s Current Report on Form 8-K which was filed today with
the Securities and Exchange Commission. The foregoing
description does not constitute a complete summary of the terms of
the transaction and is qualified in its entirety by reference to
the full text of the Omnibus Amendment which was filed as an
exhibit to the Form 8-K.
“The sale of these property management resources
to Front Yard allows Altisource to streamline its operations and
focus on its buy-renovate-lease-sell business and other
opportunities. This transaction creates value for Altisource
shareholders through the sale of a subscale and unprofitable
business line for attractive consideration,” said Chief Executive
Officer William B. Shepro.
Mr. Shepro further commented, “We are pleased to
have assisted Front Yard in its journey to reach its current scale.
As a significant shareholder in Front Yard, we also wish the Front
Yard team all the best as they continue to grow their
business.”
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that
involve a number of risks and uncertainties. These forward-looking
statements include all statements that are not historical fact,
including statements about management’s beliefs and expectations.
These statements may be identified by words such as “anticipate,”
“intend,” “expect,” “may,” “could,” “should,” “would,” “plan,”
“estimate,” “seek,” “believe,” “potential” and similar expressions.
Forward-looking statements are based on management’s beliefs as
well as assumptions made by and information currently available to
management. Because such statements are based on expectations as to
the future and are not statements of historical fact, actual
results may differ materially from what is contemplated by the
forward-looking statements. Altisource undertakes no obligation to
update any forward-looking statements whether as a result of new
information, future events or otherwise. The risks and
uncertainties to which forward-looking statements are subject
include, but are not limited to, risks relating to the transaction
with Front Yard (the “Transaction”), unanticipated expenditures
relating to or liabilities arising from the Transaction; litigation
or regulatory issues relating to the Transaction; the impact of the
Transaction on relationships with employees, customers and other
third parties; the inability to obtain, or delays in obtaining,
expected benefits from the Transactions; our ability to retain
existing customers and attract new customers and the potential for
changes in our customer relationships, including the possibility of
early termination of our Cooperative Brokerage Agreement with New
Residential Investment Corp. or the possibility that we may not be
successful in negotiating a satisfactory services agreement with
New Residential Investment Corp.; the possibility that Ocwen
Financial Corporation’s acquisition of PHH Corporation will not be
completed; various risks relating to our ability to effectively
manage our regulatory and contractual obligations; the adequacy of
our financial resources, including our sources of liquidity and
ability to repay borrowings and comply with our Credit Agreement,
including the financial and other covenants contained therein; and
other risks and uncertainties detailed in the “Forward-Looking
Statements,” “Risk Factors” and other sections of Altisource’s Form
10-K and other filings with the Securities and Exchange
Commission.
CONTACT: |
|
Indroneel
Chatterjee |
Chief Financial
Officer |
T: +352 2469
7988 |
E:
Indroneel.Chatterjee@altisource.com |
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