Saturday July 21, 2012
Washington Mutual plans to come back to life
In an unusual step, WMI Holdings, the parent company of the failed bank, is considering buying companies or starting businesses using a US$125mil credit facility, “substantial cash” and advice from the Wall Street private equity company.
WMI had not decided what it would buy and the target might not be a financial services company, sources familiar with the situation said.
The idea was to find a good management team and a profitable operating business that could be grown, the sources said, adding that the process was still in the initial stages.
One attraction for the company was its net operating liabilities, or NOLs, which could be used to reduce the tax bill for a profitable business, the source said.
But for that WMI would have to be the buyer, as NOLs did not carry over if the company that held them was acquired, the source said.
“It could create a lot of value to buy a business,” the source said.
Based in Seattle, Washington Mutual was 119 years old when regulators seized it on Sept 25, 2008, at the height of the financial crisis. With US$307bil in assets, it was one of the biggest corporate casualties of the crisis, alongside Lehman Brothers Holdings and Bear Sterns, and remains the largest US bank or thrift to fail. — Reuters