After Lehman Brothers spent weeks shooting down rumours of trouble, news comes today that the bank may be in the process of being rescued by Korea Development Bank, which could purchase as much as a 25 per cent stake in the firm.
Bloomberg: Korea Development Bank is in talks to buy a stake in Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, as Asian investors shore up Wall Street firms beaten down by the global credit squeeze.
Lehman climbed as much as 5 per cent in Frankfurt trading after Korea Development Chief Executive Officer Min Euoo Sung confirmed the discussions in an interview in Seoul today. “I cannot comment further,” said Min, who headed Lehman’s Seoul branch before joining the Korean bank in June.
An investment from Korea Development would help Lehman Chief Executive Officer Richard Fuld bolster the company’s finances after $8.2 billion of writedowns on mortgage-related assets and a 75 per cent share-price plunge this year. Government-backed firms in Korea, China and Singapore have bought into stricken Wall Street banks during the past year, betting their investments will yield windfalls when financial markets stabilise.
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