On June 4, 2025, Nelnet, Inc. ("Nelnet") received cash proceeds of $411 million as a result of redeeming certain of its membership interests of ALLO Holdings LLC ("ALLO") under a Membership Unit Redemption Agreement previously reported on a Current Report on Form 8-K filed on April 21, 2025.
As part of this transaction, Nelnet redeemed a portion of its voting membership interests of ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. As a result of the redemption, Nelnet recognized a pre-tax gain of $175 million.
Immediately following the closing of the transaction, Nelnet no longer owns any preferred membership interests of ALLO, but maintains a significant voting equity investment in ALLO. Nelnet's ownership of ALLO decreased from 45% to 27%. Nelnet will continue to account for its remaining 27% voting membership interests of ALLO under the Hypothetical Liquidation at Book Value (HLBV) method of accounting, with a carrying value of $0.