Attached files
| file | filename |
|---|---|
| 8-K - COMPUCREDIT HOLDINGS CORPORATION REG FD DISCLOSURE - Atlanticus Holdings Corp | form8k.htm |
EXHIBIT
99.1
COMPUCREDIT
HOLDINGS CORPORATION
ANNOUNCES
FILING OF FORM 10 IN CONNECTION WITH ITS PREVIOUSLY ANNOUNCED CONSIDERATION OF A
SPIN-OFF OF ITS MICRO-LOAN BUSINESSES
ATLANTA,
GA, January 4, 2010 -- CompuCredit Holdings Corporation (NASDAQ:
CCRT) today announced that its wholly owned subsidiary, Purpose Financial
Holdings, Inc., has filed a Form 10 Registration Statement and a related
Information Statement with the Securities and Exchange Commission in connection
with CompuCredit’s previously announced consideration of a tax-free spin-off of
Purpose Financial and its micro-loan businesses into a separate, publicly traded
company. Prior to the completion of the spin-off transaction,
CompuCredit’s Board of Directors would have to formally approve the spin-off
distribution, and there is no certainty at this time that the spin-off actually
will occur. Should the spin-off occur, it also is anticipated that
Purpose Financial would apply to list its common stock on NASDAQ.
The
spin-off would create two stand-alone, publicly traded companies: (i)
CompuCredit: a provider of credit and related financial services and products to
the “sub-prime” credit market; and (ii) Purpose Financial: a micro-loan finance
company primarily engaged in the business of marketing, servicing and/or
originating small-balance, short-term loans through a network of 316 retail
branch locations in Alabama, Colorado, Kentucky, Mississippi, Ohio, Oklahoma,
South Carolina, Tennessee, and Wisconsin and via the Internet in both the U.S.
and the U.K. The businesses to be evaluated for spin-off had revenues of
approximately $98.4 million and $107.2 million for the nine months ended
September 30, 2009 and year ended December 31, 2008, respectively.
CompuCredit’s
Board of Directors and management are evaluating the proposed spin-off to
determine whether the separation of the micro-loan businesses from the remainder
of CompuCredit is in the best interests of CompuCredit and its shareholders
given the following potential benefits:
|
·
|
greater
access for CompuCredit to banks and potential investors that do not do
business with companies that own micro-loan businesses, even where the
business opportunity does not involve
micro-loans;
|
|
·
|
increased
ability for CompuCredit to: maintain and attract banking relationships;
partner with private equity funds, hedge funds, and financial institutions
in acquiring credit card portfolios and other assets; and obtain debt
financing from financial institutions for credit card portfolio and other
asset acquisitions and for day-to-day
operations;
|
|
·
|
ability
of each company’s management to separately pursue the business strategies
best suited to its long-term
interests;
|
|
·
|
greater
market recognition and valuation due to the ability of analysts,
shareholders and prospective investors in each company to better evaluate
the merits of each company; and
|
|
·
|
stronger
correlation between management incentives and each company’s
performance.
|
The
CompuCredit Board of Directors and management also are considering a number of
potentially negative factors associated with the spin-off, including costs
associated with completing the spin-off and increased costs associated with
operating two public companies. CompuCredit has the right to
terminate the spin-off if at any time CompuCredit’s Board of Directors
determines, in its sole discretion, that CompuCredit and Purpose Financial are
better served being a combined company, thereby making the spin-off not in the
best interests of CompuCredit and its shareholders.
Chairman
and CEO of CompuCredit, David G. Hanna, said, “The spin-off of CompuCredit’s
micro-loan businesses could represent a significant opportunity for the boards,
management teams and shareholders of both companies. A spin-off would enable the
management and boards of both CompuCredit and Purpose Financial to have a
sharper focus on their core businesses. Additionally, as two stand-alone
entities with sound operations and talented management teams, both companies
could be better positioned to manage and grow their businesses, leverage their
distinct competitive strengths, attract and retain key employees and pursue
value-creation opportunities over the long-term.”
Purpose
Financial’s initial Form 10 Registration Statement and Information Statement
contain a detailed description of the proposed spin-off transaction, summarize
the potential advantages to both companies of the transaction, and disclose the
material risks to Purpose Financial and its shareholders.
Additional
information regarding the structure, leadership and financial operations of the
two separate companies that would result from the spin-off transaction will be
disclosed at a later time.
About
CompuCredit
CompuCredit
is a specialty finance company and marketer of branded credit cards and related
financial services. CompuCredit provides these services to consumers who are
underserved by traditional financial institutions. Through corporate and
affinity contributions focused on the underserved and un-banked communities,
CompuCredit also uses its financial resources and volunteer efforts to address
the numerous challenges affecting its customers. For more information about
CompuCredit, visit www.CompuCredit.com.
Forward-Looking
Statements
Certain
statements in this press release, including statements regarding, without
limitation, our ability to realize expected benefits from the spin-off, our
ability to list our common stock on NASDAQ, competition and market conditions in
the micro-loan industry, and our ability to find additional growth opportunities
or to identify and successfully implement new product and service offerings, may
be forward-looking in nature or “forward-looking statements,” as defined by the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks and uncertainties, including, but not
limited to: a determination by the IRS that the spin-off should be
treated as a taxable transaction; the extent to which federal, state, local and
foreign governmental regulation of micro-loan services, consumer lending and
related financial products and services limits or prohibits the operation of our
business; the future prospects of our Internet lending business in the U.K. and
the U.S.; and our relationship with the banks that provide certain services that
are needed to operate our business, that may cause actual results to be
materially different from those described in such forward-looking statements.
Certain of these risks and uncertainties are or will be described in greater
detail in Purpose Financial’s Form 10 that it filed with the Securities and
Exchange Commission. These forward-looking statements are based on CompuCredit’s
current expectations and beliefs concerning future developments and their
potential effects on CompuCredit. There can be no assurance that future
developments affecting CompuCredit will be those anticipated by CompuCredit.
CompuCredit undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.