A troubled US bank, Washington Mutual, said Tuesday it was set to receive a seven-billion-dollar cash infusion to help shore up its finances which have been ravaged by mortgage-related losses.
The Seattle, Washington-based bank, which traces its history to 1889, said it was obtaining the fresh capital as it announced it expected to post a first quarter loss of 1.1 billion dollars. Washington Mutual (WaMu) said it was raising new funds through the sale of equity securities to TPG Capital, a US private equity firm, and other investors. The bank said the fresh capital would help it shore up its stressed balance sheet.
"This substantial new capital - along with the other steps we are announcing today - will position us for a return to profitability as these elevated credit costs subside," said WaMu's chairman and chief executive Kerry Killinger. WaMu needed to raise fresh funds because of mounting losses tied to mortgage loans and borrowers defaulting on their home loans.
It said it had agreed to sell 176 million shares of its stock at a purchase price of 8.75 dollars per share to help underpin its fund-raising drive. WaMu is also selling other special shares which will further lift the amount of new capital raised.
Comments
Comments are closed for this article.