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July 5, 2008 5:50:30 PM CDT

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$6B From Outside Investors Will Shore Up Wachovia

Posted Apr 13, 08 10:48 PM CDT in Business    Most Covered

(Newser) – Ailing bank Wachovia will get a $6 billion-$7 billion shot in the arm from outside investors, the Wall Street Journal reports. Specifics of the capital infusion, designed to help the company recover from the credit crisis, haven’t been finalized. Details may be revealed when the company reports first-quarter earnings Monday; it moved the announcement up from Friday without explanation.

In exchange, the investor group could receive company shares for at least $23 each, a 15% discount on Wachovia’s Friday share price. A deal would bolster the company’s credibility on Wall Street but could anger shareholders not party to the agreement. Wachovia raised $8.3 billion from a similar capital infusion earlier this year.

Source Wall Street Journal

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Wachovia acquired mortgage-lender Golden West near the height of the housing boom.   (AP Photo/Chuck Burton, file)
Wachovia CEO Ken Thompson conceded the bank's acquisition of Golden West was an error.   (AP Photo/Chuck Burton)
Wachovia will receive between $6-7 billion from outside investors.   (AP Photo/Chuck Burton, file)
Wachovia's net income last year slid to $6.3 billion from $7.7 billion in 2006.   (AP Photo/Chuck Burton)
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credit crisis  • Wall Street  • Wachovia  • Washington Mutual  • private equity firms  • sovereign wealth funds  • mortgage loans



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