business, commercial lender, CIT Group
may sell its railroad leasing business in the US.
It sold its home-loan business for US$1.5bn in cash and US$4.4bn
in debt and other liabilities to Lone Star Funds.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
CIT will have a pretax loss of $2.5 billion in the second quarter,
as analysts estimate it received about 64 cents on the dollar for
the subprime mortgage business.
Peter Cohan, head of Peter S. Cohan & Associates said: “CIT is
desperate for cash and it is selling its biggest dog. Meanwhile,
the $2.5 billion pretax loss it’s taking is painful. But at least
CIT is stopping that bleeding.”
The company’s rail leasing business could be next in an effort
to bring in more capital. The unit could get US$800m, and GE and
GATX, a Chicago rail leasing company, may be the potential
buyers.
CIT executives declined to say on the conference call whether it
would sell its railway-leasing business.
