Walter Industries solidifies amount of cash, non-cash distributions

By Lisa Kerner

Charlotte, N.C., April 16 - Walter Industries, Inc. announced the cash and non-cash distributions it will make to its shareholders in connection with the spinoff of Walter Investment Management LLC (Spinco) and its merger into Hanover Capital Mortgage Holdings, Inc.

The newly formed company, Walter Investment Management Corp. based in Tampa, Fla., is expected to begin regular-way trading on the NYSE Amex on Monday, Walter Industries said.

After the close of trading on the New York Stock Exchange on Friday, Walter Industries expects to declare a spinoff dividend of one Spinco interest for each share of Walter Industries common stock outstanding on Feb. 27.

Spinco will pay a taxable dividend totaling approximately $80 million in cash and additional Spinco interests to holders of Spinco interests immediately following the spinoff, Walter Industries said.

Due to proration, approximately 25.6% of the Spinco interests for which cash was elected will receive a cash payment from Spinco in the taxable dividend while the remaining interests electing to receive cash instead will receive additional Spinco interests.

Spinco is expected to make a payment of approximately $1.51 per Spinco interest to holders of approximately 10.6 million Spinco interests electing to receive cash in the taxable dividend.

In addition, Spinco is expected to distribute approximately 0.3 Spinco interests to holders of approximately 42.3 million Spinco interests who elected to receive Spinco interests, made no election or elected to receive cash but instead are receiving Spinco interests as a result of proration.

A holder of 100 shares of Walter Industries common stock entitled to receive Spinco interests in the spinoff who elected to receive cash in the taxable dividend will receive approximately $38.80 in cash in the taxable dividend and 36.5 shares of Walter Investment common stock in the merger.

Walter Industries said a holder of 100 shares of its common stock entitled to receive Spinco interests in the spinoff who elected to receive additional Spinco interests in the taxable dividend or who made no election will receive approximately 39 shares of Walter Investment common stock in the merger.

Hanover is a New Jersey-based real estate investment trust.

Walter Industries, based in Tampa, produces and exports metallurgical coal for the global steel industry; produces steam coal, coal bed methane gas, furnace and foundry coke and other related products; and operates a mortgage financing and affordable homebuilding business.

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