$6B From Outside Investors Will Shore Up Wachovia

Bank selling discounted shares to combat credit crunch
By Wesley Oliver,  Newser Staff
Posted Apr 13, 2008 10:48 PM CDT
Wachovia acquired mortgage-lender Golden West near the height of the housing boom.   (AP Photo/Chuck Burton, file)
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(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. (Read more Wachovia stories.)