Ailing investment bank Lehman Brothers announced yesterday an estimated US$3.9 billion loss in its fiscal third quarter on further write-downs from the real estate meltdown as it took a series of restructuring actions.
The beleaguered Wall Street firm, seen as in desperate need for a cash injection to shore up its finances, offered no new plans on that front, but announced plans to restructure to slash its exposure to the real estate sector.
Lehman said it would generate additional capital through the sale of a majority stake of around 55 percent in its investment management division.
The firm also said it was “formally engaged with BlackRock Financial Management,” to sell an estimated US$4 billion of its British residential mortgage portfolio.
Another step announced was the spin-off of its commercial real estate portfolio worth some US$25 billion to US$30 billion.
The moves came after a meltdown of shares of the Wall Street investment bank as hopes faded for an injection of fresh capital.
Those hopes for a “white knight” were dashed yesterday as South Korea’s state-run Korea Development Bank announced that it had abandoned negotiations about buying a stake in Lehman Brothers.
Lehman shares tumbled 44.95 percent on Tuesday to end at 7.79 and have plunged 88 percent since February.
“This is an extraordinary time for our industry, and one of the toughest periods in the firm’s history,” chairman and chief executive Richard Fuld said.
“The strategic initiatives we have announced today reflect our determination to fundamentally reposition Lehman Brothers by dramatically reducing balance-sheet risk, reinforcing our focus on our client-facing businesses and returning the firm to profitability,” he said.
Lehman announced its losses and restructuring a week ahead of plans aiming to shore up confidence and avert the kind of meltdown of confidence that killed rival Bear Stearns earlier this year.
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
RSS