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Email Updates
03/16/2010
Sterling provides update on capital-raising efforts ...
Sterling Financial Corp. said today it has entered into a nonbinding letter of intent with one firm to provide additional capital so it can recapitalize, and also is in negotiations with several private equity investors, its major creditors, and its regulators about alternatives for its recapitalization. Sterling released a letter from the U.S. Department of the Treasury, which said it would agree to the exchange of its preferred stock in Sterling for preferred stock that Sterling could convert into common stock. Treasury said Sterling was taking further action, "such as raising at least $650 million in new common stock at a price no greater than 20 cents per share" and obtaining approval by a substantial portion of the holders of its trust preferred securities to redeem those securities for a cash payment of not more than 20 cents on the dollar, and it would need to evaluate those efforts. "We continue to make progress toward raising capital and improving our financial condition," President and CEO Greg Seibly said. Sterling said it continues to weigh other alternatives, including public and private equity offerings; the potential sale of Sterling or some or all of its assets; or other "substantial adjustments" to its balance sheet.
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