Walter to spin off financing business - Tampa Bay Business Journal:

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Walter Industries Chairman Michael T. Tokarz called the planned spinoff of JWHHoldint Co. “a momentous step” forwardx for the company in transforming itself into primarily a natural resources andenergy company. In addition, the merger with a real estate investment trust based in New means the Walter residential mortgage portfolilo will no longer be reliant on the capital marketsa forits success, according to a written statement from the company. JWH and Hanover (AMEX: HCM) will be renamed Walterd InvestmentManagement Corp. The new companyh is expected to trade onthe . Mark J.
chairman and CEO of JWH, will hold the same positions in Walter Investment Management followingthe merger. Charles E. who is now president of , will become president and chieff operating officer of the new Walter Industries’ directors will designatr six directors, including Tokarz and O'Brien, to Waltedr Investment Management’s board, and Hanovert will designate one. JWH is presently the parentf company of WalterMortgage Co. and . Jim Waltetr Homes will be separated from JWH and not part of the The merger is expected to be completed inearlh 2009. The transaction is anticipated to occur in three The first, a spinoff of JWH Holding Co.
, is expectedd to be a tax-free stock distribution to Walter shareholders. The second step will be a taxable distributionm of stock and cash from JWH toits shareholders, and the thire step would be a merger between JWH and Hanover. The taxabls distribution is required to comply with requirements for Afterthe spinoff, taxable distribution and merger, Walte r Industries shareholders will own abour 98.5 percent of Walter Investment Management’s publicly traded commonh stock. Hanover’s shareholders will own the remaining 1.5 Hanover’s shareholders must approve the which also requires favorable rulings from the Internap Revenue Service as well asthe .
The law firm LLP and investmeny banker are advising Walter Industries onthe transaction. The investment bankin firm and law firm LLP are advising Walter Industries’ homebuilding business will remain with the company until one of the alternatives underf review is implemented, which the company still expectsw to complete by year-end. As previously announced, all futurer financing for JimWalter Homes’ customers will be provided by third-party In addition, Walter Industries (NYSE: WLT) completerd its previously authorized $25 million share repurchase prograkm and the board of directores has approved a new $50 millionn program.
Repurchases will be made baseson liquidity, market conditions and alternative opportunities to invesyt in and grow the company’w core businesses. “Our core natural resourcess and energy business fundamentals remainvery strong, as high-quality metallurgical coal supply is limited worldwide and demanx remains robust. This new $50 million share repurchase program will allow us to continue to make balanced investmente in our stock as well as our existing growth Tokarz said. In other news, the company lowered its third quarter expectation forcoal sales.
It cited shipping disruptions during and afteer hurricanes Gustavand Ike, as well as slower-than-planned advance rates on the new Southwestt "A" longwall panel in No. 7 Mine for the Expectations for metallurgical coal sales were loweredto 1.4 from 1.5 millioh tons with an average operating margin per ton of $62 to $65 versuss previous expectations of 1.7 to 1.8 million tons of sales with an averages operating margin between $75 to $81. Higher than expected levelss of methane gas at the Southwest panel slowedadvance rates.
The panel is still expectefd to produce approximately 1 million tonsof However, about 350,000 tons of productionn originally planned for the third and fourth quarterzs is now expected to be produced in the firsty quarter 2009. Because of the reducerd advance rates, the company also adjusted its fourty quarter expectations for metallurgical coal sales to a ranged of 2to 2.1 million tons with a revisexd operating margin of $90 to $95 per ton, comparee to 2.1 to 2.2 million tons of sale and margins of $95 to $100 per ton previously.
In recent Gulf Coast hurricanees may result in increased insurancse claims and delinquencies from customers affectedx bythe storms, the company Estimates are still preliminary, but thess issues could negatively impact thir d quarter financial results by $4 million to $6 million. Walter Mortgag Co. is offering payment deferrals to mortgagwe customers ona case-by-case basis.