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Viad Corp Makes Progress Toward Separation of Travelers Express

Friday 27 February 2004 10:33 CET | News

Viad Corp continues to make progress toward the completion of the spin-off of MoneyGram International, a newly formed subsidiary that will hold its payment services businesses currently conducted by Travelers Express Company.

Most recently, the company has received a favorable private letter ruling from the Internal Revenue Service (IRS), met with potential lenders concerning new credit agreements for each of MoneyGram and remaining Viad and received comments on the Form 10 registration statement from the Securities and Exchange Commission (SEC). The company provided the following chronology of significant events and next steps. Status of Spin-off Transaction -- On July 24, 2003, Viad announced that the board of directors authorized the company to pursue the separation of the Travelers Express business from the remaining Viad businesses by means of a spin-off. The company indicated at that time that the transaction was subject to a number of conditions including, among other things, receipt of a satisfactory ruling from the IRS, confirmation that the long-term debt of Travelers Express will have an investment grade rating, availability of satisfactory banking and credit arrangements for each of the businesses, and final approval of the board of directors of Viad. -- On July 29, 2003, Viad announced that the company would tender for all of its public debt, pay off its commercial paper and redeem its preferred stock in connection with the transaction. -- On August 5, 2003, Viad filed a ruling request with the IRS regarding the proposed spin-off. -- On December 29, 2003, Viad announced that, effective with the spin-off, Travelers Express will operate under the new MoneyGram corporate name. Also, MoneyGram International, Inc. filed a preliminary registration statement on Form 10 with the SEC to register the common stock of MoneyGram International, Inc. to be distributed to shareholders in connection with the spin-off. -- On February 11, 2004, Viad announced it had received a favorable private letter ruling from the IRS confirming, among other things, that the proposed spin-off of Viads global payment services business will qualify as tax-free to Viad and its stockholders. -- On February 12, 2004 and February 20, 2004, New Viad and Travelers Express, respectively, held lenders meetings and received positive feedback. Next Steps Viad indicated that the following significant steps remain to be completed before the transaction can be consummated: -- Complete the Form 10 registration statement response process with the SEC. -- Meet with rating agencies, which is expected to occur in early March. -- Tender for outstanding public debt, pay-off commercial paper, and redeem preferred stock. -- Finalize banking agreements and credit facilities for New Viad and MoneyGram International. -- Obtain approval from the Viad Corp board of directors. Viad Corp can give no assurance that any such transaction will be consummated. The transaction is not expected to be consummated any earlier than the beginning of the second quarter of 2004.


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Categories: Payments & Commerce | Payments General
Countries: World
This article is part of category

Payments & Commerce