In search for adequate liquidity, the management of JG Wentworth Co (NYSE: JGW) said it was in the process of looking for new ways to raise money. That came after the company announced $110.8 million in sales of a portfolio of assets including structured settlement, annuity and lottery payments. The transactions were done through a private placement format.
Two asset pools
JG Wentworth Co (NYSE: JGW) said that the $110.8 million sale it recently made comprised two asset pools. In the first pool, the company transacted assets worth $50.8 million on June 17 and that deal generated net cash of more than $18 million after the company had paid off related expenses, especially warehouse facility charges.
JG Wentworth Co (NYSE: JGW) said the second pool is worth $60 million and although the sale has been initiated, it will not close until 3Q2016. It seems the net cash from the second pool will be known after the transaction closes.
Favorable economic environment
JG Wentworth Co (NYSE: JGW) is making the $110.8 million asset sales at a time that the management considers to be a favorable economic period compared to when it last made a similar transaction.
Not only do prices appear favorable, but the company has also noted that it has multiple ways to sell assets to generate cash to boost its liquidity.
The assets recently sold were originated by JGW itself and also through Peachtree Financial Solutions companies.
Beyond ABS platform
JG Wentworth Co (NYSE: JGW) is looking to raise additional funds to strengthen its liquidity position through avenues other than its ABS platform, the management disclosed in a press release.
JG Wentworth’s asset sales is a way of raising additional funds without diluting shares and that should make investors more comfortable in the stock.
JG Wentworth Co (NYSE: JGW) 1Q2016 financials
JG Wentworth Co (NYSE: JGW) generated revenue of $66.6 million in 1Q2016 compared to $86.8 million in the comparable quarter a year ago. It suffered an EPS loss of $1.03.