DOW JONES NEWSWIRES
Capmark Financial Group Inc. entered an agreement that would allow it to unload its North American servicing and mortgage-banking operations to a new company owned by Berkshire Hathaway Inc. (BRKA, BRKB) and Leucadia National Corp. (LUK) for up to $490 million.
The financial services provider came under pressure from banks in March when it missed a bridge-loan payment, triggering payments on default-swaps contracts. Earlier Wednesday, the embattled company reported a $1.61 billion quarterly loss as losses on loans, investments and real estate continued to pile up. Capmark is working to restructure its debt and looking at options for all of its businesses.
Capmark paid $40 million for the put option, which would call for the buyers to pay $375 million in cash at the closing if the sale occurs outside of bankruptcy proceedings. Under the pact, the price would also include a $40 million holdback retained by the buyers to cover indemnity claims and a $75 million note that is subject to adjustments in losses in Capmark's Fannie Mae ( FNM) portfolio.
If the sale happens within bankruptcy proceeds, the price will comprise $415 million in cash and the $75 million note, subject to court authorization.-By Jay Miller, Dow Jones Newswires
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