UPDATE 1-First Marblehead says GS investment yet to get approval
(Recasts, adds details, share movement)
June 26 (Reuters) - First Marblehead Corp FMD.N said a Goldman Sachs' (GS.N: Cotización) affiliate was yet to receive regulatory approval for a planned $200 million investment in the ailing securitizer of student loans.
In December, Goldman Sachs Capital Partners (GSCP) had agreed to provide an aid of up to $260.5 million in the company, of which $59.8 million was made immediately. The balance $200.7 million was to be invested through purchase of additional securities at a conversion price of $15 per share.
The student lender had expected the second step of investment to be completed by the end of June.
First Marblehead shares have tumbled about 80 percent since January hurt by a slump in the demand for securities backed by student loans.
The shares closed at $2.92 on the New York Stock Exchange Thursday, well below the conversion price agreed in the Goldman deal.
At the time of the deal, Goldman's Managing Director Henry Cornell said the investment was consistent with the firm's strategy of putting money into "market leaders with strong business models".
The total investment, if completed, would leave Goldman Sachs, the world's biggest securities firm, owning 20 percent of Boston-based First Marblehead's outstanding shares.
First Marblehead helps banks like JPMorgan Chase & Co (JPM.N: Cotización) private student loans into trusts, which issue notes to investors.
(Reporting by Sweta Singh, Editing by Dinesh Nair)
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