GE Capital Inks Deal with CIFC; Receives 4.9 Million in Cash and One Million Shares

   By Saabira Chaudhuri 
 

GE Capital Corp. and asset manager CIFC Corp. (DFR) have inked an agreement to explore business opportunities and facilitate third-party investment advisory referrals.

Under the terms of the agreement unveiled Tuesday, GE Capital will receive one million shares of CIFC common stock--valued at Monday's close at $7.25 million--warrants to purchase two million shares of a newly created class of non-voting CIFC preferred stock, and about $4.9 million in cash from CIFC.

The two companies will form a commercial council made of senior members of both companies. Peter Gleysteen, chief executive of CIFC, and Neeraj Mehta, a GE officer, are slated to serve as co-chairs of the council. GE Capital has the right to appoint an executive to CIFC's board.

GE Capital Debt Advisors LLC, a unit of GE Capital, will exit its third-party investment advisory business, and has agreed to assign its role as manager of four collateralized loan obligation funds representing about $700 million in assets under management to CIFC Asset Management LLC, a unit of CIFC.

The transaction is expected to close in September.

Shares of CIFC closed at $7.25 Monday and were inactive premarket. The stock is up 34% so far this year.

Write to Saabira Chaudhuri at [e-mail]

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