The credit crunch has
claimed another victim in the person of Washington Mutual Inc.'s CEO Kerry Killinger. He will be replaced by Alan Fishman, the current COO of commercial mortgage broker Meridian Capital Group and former COO of Sovereign Bancorp, the second-largest savings and loan behind Washington Mutual.
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Seattle-based Washington Mutual also said it worked out a new business
plan with regulators "in several areas of its risk management and
compliance functions ... that will not require the company to raise
capital, increase liquidity or make changes to the products and
services it provides to customers."
Write-downs connected to subprime mortgages have resulted in $6.3
billion in losses this year for Washington Mutual and driven the stock
down roughly 88%. The bank has already had to
raise capital earlier
this year, selling $7 billion in new common shares to a TPG
Capital-led consortium, the terms of which outraged shareholders. The
deal, front loaded with penalties should it not be approved by
shareholders, diluted existing stockholders by nearly half. But even
after paying $8.75 each for their new shares, a steep 33% discount to
its $11.77 closing price the day before, TPG has already lost more than
half its investment as the stock closed at $4.27 last Friday.
- George
White
See press release
See Dealscape post on TPG investment
