June 19, 2008 / 1:48 PM / 11 years ago

UPDATE 1-MoneyGram CEO Philip Milne resigns after losses

(Recasts; adds details)

June 19 (Reuters) - MoneyGram International Inc MGI.N on Thursday said Chairman and Chief Executive Philip Milne has stepped down, following his failure to sell the payment services provider and after heavy losses from betting on mortgages.

The company said Anthony Ryan will oversee day-to-day operations in the interim while it searches for a new chief executive.

MoneyGram’s investment portfolio has taken a hit due to deteriorating credit market conditions, and the company has been struggling to move away from riskier asset-backed securities to safer instruments such as government debt.

Meanwhile, talks for MoneyGram to be acquired by smaller rival Euronet in a transaction originally valued at $1.65 billion broke down in February.

The following month, Minneapolis-based MoneyGram sold $760 million of preferred stock to an investment group led by Thomas H. Lee Partners LP [THL.UL] and Goldman Sachs & Co (GS.N).

The conversion price for the stock, however, was cut in half from the companies’ prior agreement, reflecting Moneygram’s failure to meet certain conditions.

Shares of MoneyGram were trading up more than 2 percent at $1.21 in morning trade on the New York Stock Exchange. Through Wednesday, the shares had fallen 97 percent in the last year. (Reporting by Akshay Lodaya in Bangalore; Editing by Anil D’Silva)

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