Origen Financial Announces Closing Of Asset Sale To GoldenTree And Entry Into Letter Of Intent

SOUTHFIELD, Mich., Jan. 20, 2015 /PRNewswire/ -- Origen Financial, Inc. (Pink Sheets: ORGN), a real estate investment trust, announced that it completed the sale of substantially all of its assets to an affiliate of GoldenTree Asset Management LP. Gross proceeds to Origen were $47 million reduced by approximately $5.9 million of cash on hand from distributions that, under the asset purchase agreement, belongs to GoldenTree. Together with other cash on hand, Origen holds approximately $47.2 million in cash.

Origen also announced that it has entered into a Letter of Intent ("LOI") with Mack Real Estate Credit Strategies ("MRECS"), an affiliate of Mack Real Estate Group ("MREG"), for a proposed transaction pursuant to which MRECS and other third parties would invest additional capital into Origen by purchasing shares of newly issued common stock (MRECS is targeting $200 to $400 million). The company would continue to operate its business as a mortgage REIT and would be externally managed pursuant to a market-based management agreement with MRECS. Under the MRECS business plan, the company would originate and hold transitional first mortgage loans secured by commercial real estate.

The MRECS business plan identifies potential strategic benefits to current Origen stockholders who choose to continue their equity position with the recapitalized company, including: (a) alignment with the MRECS sponsor that will make a significant co-investment, (b) potential deferral of capital gains or other taxes on gains from a stock sale, (c) a modest valuation premium, and (d) anticipated cost savings versus status quo wind-down.

Under the LOI, it is anticipated that Origen's stockholders would be given the option to: (a) tender their shares to Origen for cash in an amount equal to Origen's estimated current per share net cash value, payable at the conclusion of the tender period, or (b) retain their shares in Origen.  Stockholders that tender their shares to Origen will receive the entire estimated net cash value payment shortly after the tender of such shares. Management estimates that the net cash value per share tender price will be higher than the estimated amount of liquidation distributions that would otherwise be payable to Origen stockholders absent a MRECS transaction. The improved value is due to expected savings in dissolution costs and expenses, as well as the benefit of receiving an earlier payment than would be the case in a liquidation. The LOI also proposes to provide liquidity to rolling Origen stockholders through a public offering and listing on a national securities exchange within 12 to 24 months of closing.   

Origen's Board of Directors approved the LOI and, as permitted by the plan of dissolution approved by Origen's stockholders in October 2014, Origen has abandoned the plan of dissolution and the distribution of its remaining cash net of expenses and reserves pending completion of the transaction with MRECS. Had Origen proceeded with dissolution and distributions of its net cash, the estimated per share amount that would be distributed is less than the amount estimated in Origen's proxy materials for the special meeting held in October. The reason for this lower per share amount primarily is attributable to additional operating expenses and transaction expenses resulting from an unavoidable three month delay in completing the GoldenTree transaction. Current members of Origen's Board of Directors have indicated that they will elect to continue as post-closing Origen stockholders in respect of a substantial portion of the Origen shares they own. MRECS has agreed that one existing Origen director will be appointed to Origen's post-closing Board.

The MRECS transaction is subject to the further negotiation and execution of definitive transaction documents, MRECS's satisfactory completion of its due diligence on Origen, and other customary closing conditions. Origen expects to deliver tender offer materials to its stockholders after the execution of definitive transaction documents, which are anticipated to be completed before mid-February 2015. More detailed information on the tender price and a comparison to management's estimated distributions upon dissolution, the MRECS transaction and the post-closing business plan for Origen will be included in the tender offer materials.

About Origen Financial, Inc.

Origen is an internally managed and internally advised company that has elected to be taxed as a real estate investment trust. Origen is based in Southfield, Michigan.

For more information about Origen, please visit www.origenfinancial.com.

About GoldenTree Asset Management LP

GoldenTree Asset Management LP is an asset management company specializing in corporate and structured credit markets. GoldenTree is one of the largest independent asset managers specializing in corporate and structured credit, with primary offices in New York and London. GoldenTree manages approximately $21 billion in assets across a variety of absolute return, long only and opportunistic strategies. GoldenTree has over 190 employees including more than 40 investment professionals. The firm is 100% employee owned.

For more information about GoldenTree, please visit www.goldentree.com.

About Mack Real Estate Group

Mack Real Estate Group ("MREG") was founded in 2013 by William, Richard, and Stephen Mack.  MREG is a fully integrated owner/operator/developer devoted to managing the Mack family's capital, institutional capital, and high net worth capital through direct and partnership investments in real property, real estate debt, and related securities. MREG's principals have over a century of combined global real estate investing experience. MREG recently launched a broader commercial real estate debt investment platform, Mack Real Estate Credit Strategies ("MRECS"). Peter Sotoloff, one of the founders of Blackstone Real Estate Debt Strategies platform, recently joined MRECS as Managing Member and Chief Investment Officer.

Forward-Looking Statements

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Origen intends that such forward-looking statements will be subject to the safe harbors created thereby. The words "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate" and similar expressions identify these forward-looking statements. These forward-looking statements reflect Origen's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this press release. These risks and uncertainties may cause Origen's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the foregoing assumptions, the fact that Origen cannot predict whether the MRECS transaction will be consummated on any particular terms, or at all.  The forward-looking statements contained in this press release speak only as of the date hereof and Origen expressly disclaims any obligation to provide public updates, revisions or amendments to any forward- looking statements made herein to reflect changes in Origen's expectations or future events.

SOURCE Origen Financial, Inc.

Related Links

http://www.origenfinancial.com