MoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes

Must Read

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -

MoneyGram International, Inc, a global leader in cross-border P2P payments and money transfers, announced today that its Board of Directors has adopted a Tax Benefits Preservation Plan designed to protect and preserve the Company’s existing U.S. federal net operating loss carryforwards, U.S. federal tax credit carryforwards and other tax attributes, which can potentially be utilized in certain circumstances to offset the Company’s future U.S. federal income tax obligations.

As of December 31, 2019, the Company had estimated U.S. federal NOLs of approximately $45.4 million that could be available to offset its future U.S. federal taxable income.

In addition, as of December 31, 2019, the Company had estimated U.S. federal tax credit carryforwards of approximately $12.9 million that could be available to reduce its U.S. federal income tax.

The Board adopted the Plan to protect the Company’s Tax Attributes from potentially decreasing in value upon certain ownership changes involving “5% shareholders,” as defined under Section 382 of the Internal Revenue Code (the “Code”).

The Plan is similar to tax benefit preservation plans adopted by other publicly-held companies with NOLs or other tax attributes that they wish to preserve and has a limited duration of three years.

- Advertisement -

The Company’s ability to use its Tax Attributes would be substantially limited if it were to experience an “ownership change,” as defined under Section 382 of the Code.

A corporation generally will experience an ownership change if the percentage of the corporation’s stock owned by one or more 5% shareholders increases by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

The Plan reduces the likelihood that changes in the Company’s investor base would limit the Company’s future use of its Tax Attributes, which could permanently impair the value of such Tax Attributes.

The Company believes that no ownership change under Section 382 has occurred as of the date of this press release.

- Advertisement -

To implement the Plan, the Board declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock.

The Rights will be issued to stockholders of record at the close of business on August 7, 2020, pursuant to the Tax Benefits Preservation Plan (the “Rights Agreement”) dated July 28, 2020, by and between the Company and Equiniti Trust Company, as Rights Agent.

Read Also:  Manufacturers Stand Against FG Proposal In Increase Of Taxation And VAT

The Rights will be exercisable if a person or group of persons acquires 4.95% or more of the Company Stock (as defined in the Rights Agreement to include outstanding Company common stock, the Series D Participating Convertible Preferred, the Second Lien Warrants and the Ripple Warrants).

The Rights will also be exercisable if a person or group of persons that already owns 4.95% or more of the Company Stock acquires an additional share (other than as a result of a dividend or a stock split).

- Advertisement -

Existing stockholders that beneficially own in excess of 4.95% of the Company Stock will be “grandfathered in” at their current ownership level. If the Rights become exercisable, all holders of Rights, other than the person or group of persons triggering the Rights, will be entitled to purchase shares of the Company’s common stock at a 50% discount.

Rights held by the person or group of persons triggering the Rights will become void and will not be exercisable.

The distribution of the Rights should not be taxable to the Company’s stockholders. The Rights will trade with the Company’s common stock and will expire at the close of business on July 28, 2023.

Read Also:  Tax Default: Kogi Govt seals off all Union Bank Branches in the state

The Rights will expire under other circumstances as described in the Rights Agreement, including on the date set by the Board following a determination that the Plan is no longer necessary or desirable for the preservation of the Tax Attributes or no Tax Attributes are available to be carried forward or are otherwise available.

The Board may terminate the Plan prior to the time the Rights are triggered or may redeem the Rights prior to the Distribution Date, as defined in the Rights Agreement.

Additional information with respect to the Plan and the related Rights will be contained in a Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission (“SEC”).

The Rights issued in the Plan are issued pursuant to the Rights Agreement, a copy of which will be filed as an exhibit to the Current Report on Form 8-K. For more information regarding the Company’s Tax Attributes, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

- Advertisement -
MoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand SpurMoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

MoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand SpurMoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand Spur

Latest News

Qatar Airways Touches Down for the First Time in Abuja, Nigeria

The airline will operate three weekly flights from Abuja via Lagos Passengers from Abuja can enjoy more flexible travel options...

Why the South African Rand is 2nd-best performing EM currency

Since the onset of the COVID-19 pandemic, foreign exchange markets experienced a whirlwind of volatility as movement restrictions and a weakened global trade weighed...

Weststar Increases Product Portfolio with Mercedes-Benz Axor

Weststar Associates Limited, Authorized General Distributor of Mercedes-Benz in Nigeria, has announced Mercedes-Benz Axor as its new offering for commercial vehicle fleet owners in...

Ellah Lakes announces a joint venture with Ondo State for the development of Oil Palm and Cassava Plantation

Lagos, November 27, 2020: Ellah Lakes Plc (Ellah Lakes) is happy to announce that it has executed an agreement with Ondo State Government for...

GOtv Nigeria: For the Love of Local Entertainment

In two days, a new cooking and lifestyle show will debut on GOtv, the digital terrestrial television platform from MultiChoice Nigeria. Titled 'Jollof With...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -MoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand SpurMoneyGram Adopts Tax Benefits Preservation Plan to Protect Tax Attributes - Brand Spur