Citadel Advisors LLC, a hedge fund headed by Kenneth Griffin increased its total stockholdings in PHH Corporation (NYSE:PHH) to 5,465,878 shares or 9.5% stake based on its 13G filing with the Securities and Exchange Commission (SEC).

PHH Corporation

The hedge fund owned around 3.97 million shares or 6.9% stake of PHH Corporation (NYSE:PHH) last month. Its latest filing showed that Citadel Advisors added its stockholding in the company by approximately 1.5 million shares.

PHH Corporation provides business process management for mortgage and fleet industries. The company has three business segments including mortgage production, mortgage servicing and fleet management services.

PHH Corporation completes sale fleet management services

Last month, PHH Corporation (NYSE:PHH) entered a definitive agreement to sell PHH Arval, its fleet management services business to Element Financial Corp (TSE:EFN) for approximately $1.4 billion in cash. At the time, Glen Messina, CEO of PHH Corporation (NYSE:PHH) said the agreement best positions its fleet and mortgage businesses to capitalize on strategic opportunities while maximizing value for shareholders.

Last week, PHH Corporation (NYSE:PHH) completed the sale of PHH Arval to Element Financial Corp (TSE:EFN).  According to Messina, the completion of the transaction is an important step forward for the company because it will now have a financial flexibility to return significant capital to shareholders, accelerate the reduction of its unsecured debt, re-engineer its mortgage business and pursue opportunities to enhance its profitability.

PHH Corporation approves shares buyback

PHH Corporation (NYSE:PHH) expected to generate $821 million in net proceeds from the sale of its fleet management services business subject to purchase price adjustments and the final determination of taxes. As of March 31, 2014, the company’s pro forma consolidated cash and cash equivalents including the estimated net proceeds were $1.75 billion.

Following the completion of the sale, the board of directors of PHH Corporation (NYSE:PHH) approved a share buyback worth approximately $450 million including $200 million accelerated stock repurchases program, which is expected to begin after its financial results in the second quarter. The remaining $250 million will be used in repurchasing its own stock in open markets over the next twelve months after the completing its accelerated stock repurchases.

PHH Corporation (NYSE:PHH) also plans to redeem all of its outstanding 9.25% senior notes due in 2016 in the third quarter this year. The company also plans to use as much as $200 million to restructure its operations and support infrastructure and will focus on transforming its private label business model and reduce its production costs. It will also consolidate its corporate and mortgage support infrastructure and make investment in technology to support growth and productivity.