June 4, 2009 / 5:17 PM / 10 years ago

UPDATE 1-Corus hires BofA to help find capital, buyer-Bloomberg

(Adds BofA, Colony Capital, Related Cos response, background, stock activity)

BANGALORE, June 4 (Reuters) - Struggling real-estate lender Corus Bankshares Inc CORS.O has hired Bank of America Corp (BAC.N) to help it find capital or sell the company to avoid shutting down operations, Bloomberg said, citing people familiar with the matter. Bank of America spokesman Jerry Dubrowski said in an e-mail to Reuters that the company has no comments on the report. Corus did not respond to repeated calls and an e-mail by Reuters. The people, who requested anonymity as the process was not public, told the news agency that Los Angeles billionaire Thomas Barrack’s Colony Capital LLC and New York developer Related Cos, are among the firms that are interested in buying Corus assets.

Both Colony Capital and Related Cos declined comment to Reuters.

Investors may offer to buy the lender while it was still in business, or to purchase its assets out of receivership, those people told the agency.

Corus said last month it had to develop a capital plan by May 19, under its agreement with the Federal Reserve Bank of Chicago.

The company said earlier that month that it was “undercapitalized” and hired an investment banking firm to seek strategic options, including a capital investment, sale, strategic merger or some form of restructuring.

Chicago-based Corus, with over $7 billion in assets, had been put under special oversight by its primary federal regulators in February, after posting losses for several quarters.

The company, once a top financer of condominiums, has suffered from a rapid and precipitous decline in the value of collateral securing condominium construction loans, including many in hard-hit Arizona, southern California, southern Florida and Nevada.

Recently, the company’s top management, including its Chief Executive and Chief Operating Officer resigned, and if the company fails, it will be one of the biggest victims of the ongoing financial meltdown.

In late May, U.S. bank regulators seized Florida lender BankUnited FSB, badly hurt by a collapsed Miami property market and sold it to some of the most powerful private equity firms in the world like Wilbur Ross’s WL Ross & Co, Carlyle Group [CYL.UL], Blackstone Group (BX.N), and Centerbridge Partners.

Shares of Corus rose 3 cents to 40 cents Thursday on Nasdaq. They traded as high as $10.58 last September, Reuters data show. (Reporting by Anurag Kotoky and Esha Dey in Bangalore)

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