Thornburg Mortgage Inc (TMA.N: Quote, Profile, Research), a struggling "jumbo" home loan provider, said on Wednesday it would try to quickly raise nearly $1 billion of capital to keep five lenders at bay and avert a possible bankruptcy filing.
Shares plunged because the plan to sell $1 billion of convertible debt and give lenders a 27 percent stake in the company would significantly dilute existing shareholders' stakes. Thornburg shares closed down $1.48, or 49 percent, at $1.50.
The Santa Fe, New Mexico-based company had previously said its survival was in question after being unable to meet lender demands for more than $600 million of cash or collateral.
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