CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today corrected important inaccuracies contained in an open letter from Carl Icahn to smaller CIT bondholders. Mr. Icahn is seeking to convince smaller bondholders to vote against the Company''s proposed restructuring plan now in exchange for his ill-defined promise that some of Mr. Icahn''s unidentified "affiliated entities" will eventually deliver on that vague promise.
Over the last several months, CIT has worked together with a diverse group of bondholders in developing a comprehensive restructuring plan to position CIT for future success. The successful completion of either the exchange offers or plan of reorganization will generate significant capital and liquidity. CIT and many of its bondholders believe this plan maximizes franchise value. Importantly, under CIT''s plan all bondholders within the same class, large and small, are treated equally.
Mr. Icahn has also misrepresented the fundamental economics of the Company''s restructuring plan. As described in CIT''s plan of reorganization, senior unsecured bondholders would receive consideration of $700 in new secured bonds for every $1,000 of existing bonds, in addition to equity consideration which would allow for participation in future value created by the Company. In addition, under the Company''s plan, bondholders would receive substantially all of the equity of CIT.
CIT also clarified several facts that were misrepresented in Mr. Icahn''s letter related to its corporate governance and use of cash, both of which are detailed in the Amended Offering Memorandum. First, CIT''s Board of Directors will be comprised of a majority of new independent members, a significant number of whom will be proposed by the Company''s bondholders. In addition, CIT Chairman and Chief Executive Officer Jeffrey M. Peek has announced his resignation effective December 31st.
Second, with regard to restrictions on the use of cash, contrary to Mr. Icahn''s assertions, CIT has incorporated into its plan a cash control process that places restrictions on the reinvestment of cash into the business and ensures that certain cash flows are used to accelerate the repayment of debt.
Through the restructuring and substantial deleveraging featured in CIT''s plan, whether completed in or out of court, the Company is confident that CIT will emerge as a strong bank holding company with improved capital, liquidity and earnings potential. CIT remains fully committed to serving its small business and middle market customers, as it has for more than 100 years.
For Additional Information
A pre-recorded webcast presentation from CIT''s senior management team covering the Company''s current restructuring plan is available on its website (http://ir.cit.com). Further information about the Company, its restructuring plan, including the amended offering memorandum, is available at www.cit.com and by calling D.F. King & Co. at (800) 758-5880 or +1 (212) 269-5550.
The CIT Group Inc. exchange offers expire at 11:59 p.m., New York City time, on Thursday, October 29, 2009, with the exception of the additional notes maturing after 2018 for which there is an early acceptance date of October 29, 2009 and expiration date of November 13, 2009. The Delaware Funding Offers expire at 11:59 p.m. New York City time on Thursday, November 5, 2009 and have an Early Tender Date of October 29, 2009. Tendered securities may be validly withdrawn at any time prior to the expiration, early acceptance or early tender dates.
Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com
About CIT
CIT (NYSE: CIT) is a bank holding company with more than $60 billion in finance and leasing assets that provides financial products and advisory services to small and middle market businesses. Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination of relationship, intellectual and financial capital to its customers worldwide. CIT maintains leadership positions in small business and middle market lending, retail finance, aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in New York City, CIT is a member of the Fortune 500. www.cit.com
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of applicable federal securities laws that are based upon our current expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. The words “expect,” “anticipate,” “estimate,” “forecast,” “initiative,” “objective,” “plan,” “goal,” “project,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “commence,” “seek,” “may,” “would,” “could,” “should,” “believe,” “potential,” “continue,” or the negative of any of those words or similar expressions is intended to identify forward-looking statements. All statements contained in this press release, other than statements of historical fact, including without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results, and our actual results may differ materially. Important factors that could cause our actual results to be materially different from our expectations include, among others, CIT may need to seek protection under the US Bankruptcy Code, even if the tender offer is consummated, the risk that the $3 billion loan facility does not provide the liquidity that CIT is seeking due to material negative changes to CIT''s liquidity from draw down of loans by customers, the risk that CIT is unsuccessful in its efforts to effectuate a comprehensive restructuring of its liabilities, in which case CIT may be forced to seek bankruptcy relief. Accordingly, you should not place undue reliance on the forward-looking statements contained in this press release. These forward-looking statements speak only as of the date on which the statements were made. CIT undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except where expressly required by law.
Contacts:
CIT
MEDIA RELATIONS:
C. Curtis Ritter, 212-461-7711
Director
of External Communications & Media Relations
Curt.Ritter@cit.com
or
CIT
INVESTOR RELATIONS:
Ken Brause, 1-866-54CITIR
(542-4847)
Executive Vice President
investor.relations@cit.com
