FORT WORTH, Texas, Nov 24, 2008 (BUSINESS WIRE) -- AMERICREDIT CORP. (NYSE: ACF) announced today that it has entered into
an agreement with Fairholme Funds, Inc. ("Fairholme"), under which
AmeriCredit will issue approximately 15.1 million shares of its common
stock to Fairholme in exchange for AmeriCredit's 8.50% Senior Notes due
2015 (the "Notes") at a price of $840 per $1000 principal amount of the
Notes, which are currently held by Fairholme and will be cancelled. The
par value of the Notes to be exchanged will be determined based on the
lower of 120% of the ten-day average closing price of AmeriCredit's
common stock immediately prior to the closing of the exchange
transaction, or $6.02 per share. As part of this agreement, Fairholme
has also agreed to:
--
Purchase approximately $123.0 million of notes rated below AAA in
AmeriCredit's next asset-backed securities offering, expected in
November 2008.
--
Enter into a two-year standstill agreement that limits its ownership
of AmeriCredit's common stock together with the ownership of
AmeriCredit's common stock by certain accounts advised by Fairholme
Capital Management, L.L.C., and by affiliates to 28.9%. Fairholme will
be entitled to one seat on the Company's Board of Directors.
Fairholme and other accounts managed by and affiliates of Fairholme
Capital Management, L.L.C., beneficially own in the aggregate
approximately 23.0 million shares, or 19.8% of the outstanding shares of
AmeriCredit's common stock. The issuance of additional shares to
Fairholme requires approval of AmeriCredit's shareholders according to
the shareholder approval policy of the New York Stock Exchange (the
"Exchange"). However, the Audit Committee of the Board of Directors of
AmeriCredit has determined that the delay necessary in securing
shareholder approval would impair the Company's ability to complete a
securitization transaction in a timely fashion, which, in turn would put
the financial viability of the Company at substantial risk. Accordingly,
the Audit Committee, pursuant to an exception provided in the Exchange's
shareholder approval policy for such a situation, expressly approved the
Company's omission to seek the shareholder approval that would otherwise
have been required under that policy. The Exchange has accepted the
Company's application of the exception.
AmeriCredit, in reliance on the exception, is mailing to all
shareholders a letter notifying them of the Company's intention to issue
the shares without seeking their approval. The Company intends to issue
shares of the Company's common stock to Fairholme no less than ten days
after the letter to shareholders is mailed.
About AmeriCredit
AmeriCredit Corp. is a leading independent automobile finance company
that provides financing solutions indirectly through auto dealers across
the United States. AmeriCredit has over one million customers and
approximately $14 billion in auto receivables. The Company was founded
in 1992 and is headquartered in Fort Worth, Texas. For more information,
visit www.americredit.com.
SOURCE: AmeriCredit Corp.
AmeriCredit Corp., Fort Worth
Caitlin DeYoung, 817-302-7394