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MoneyGram exploring options, potential sale

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TEXAS: MoneyGram International Inc is exploring strategic alternatives, including a sale of the money transfer company, a year after a US government panel nixed its $1.2 billion sale to China’s Ant Financial, people familiar with the matter said on Friday.


The Dallas-based company’s shares have lost 83 per cent of their value since the deal with Ant Financial collapsed in January 2018. In November, the company had to grapple with a $125 million financial penalty from US regulators for failing to crack down on fraudulent money transfers. MoneyGram shares closed up 10.6 per cent at $2.29 on Friday, for a market capitalization of $127.4 million, after media reported on MoneyGram’s exploration of a potential sale.


MoneyGram is also working to restructure its debt pile, which totalled $902.8 million as of the end of September and comes due next year, the sources said. The company has more than $80 million available from an undrawn credit line.


The company, whose largest shareholder is private-equity firm Thomas H Lee Partners LP and which employs more than 2,900 people globally, had about $200 million in cash at the end of September.


MoneyGram’s debt restructuring efforts are initially focused on addressing a covenant tied to its credit line, the sources said. The company is seeking more time to meet the terms of that covenant, by pushing out a March deadline it faces, the sources added.


In addition, the company hopes to extend the maturity on its roughly $900 million loan, the sources said. Without any action, that debt would soon become “current” for accounting purposes and potentially trigger jitters among MoneyGram’s creditors and shareholders, the sources said.


A spokeswoman for MoneyGram, which has agents at roughly 350,000 outlets in more than 200 countries and territories, declined to comment on the company’s sale process, while reiterating that the firm is focused on refinancing its debt.


The sources cautioned that a sale of the company is not certain and asked not to be identified because the deliberations are confidential. — AFP



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