Lehman Brothers (LEH) CEO Dick Fuld is entertaining a number of options to raise capital, according to the New York Post. Fuld has reportedly met with several private equity groups as well as foreign investors from South Korea and other parts of Asia.
If Fuld is to “de-risk” Lehman’s balance sheet, he will have to simultaneously offload Lehman’s toxic mortgage assets and find new capital to cover the loss from the sale. But Fuld faces a tough choice. A dilutive equity raise would punish shareholders, but the sale of Lehman’s asset management group Neuberger Berman would eliminate one of Lehman’s most successful businesses. The Post:
A number of options are on the table, including selling Lehman’s asset-management unit Neuberger Berman.
Several private-equity firms are said to have expressed an interest in acquiring a majority stake in Lehman’s asset management business, but no formal sale of the unit has been launched, according to sources.
However, because that business is at the core of the Lehman franchise, Fuld sees unloading it as a last-ditch measure, sources said.
A Lehman spokesman declined to comment and officials at Blackstone and BlackRock did not return calls.
The Post’s sources also say that Fuld is still reluctant to sell Lehman’s mortgage assets at the bargain basement prices that Merrill Lynch fetched for its CDO book.
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