CIT shares drop on bankruptcy warning
Shares of CIT Group Inc sank 20 percent on Tuesday after the troubled lender delayed filing its second-quarter report with regulators and again warned it may have to file for bankruptcy.
CIT, which has been battling to restructure its debt, said in a filing with the U.S. Securities and Exchange Commission that management is focused on restructuring the company to avoid bankruptcy and it was unable to file its quarterly report by the deadline on Monday.
The 101-year-old lender, which last month secured $3 billion in emergency funding from bondholders, has launched a tender offer for $1 billion of floating-rate notes due August 17.
In the filing on Tuesday, it warned that if the tender offer is not successful and if the company is unable to secure alternative financing, it may be forced into bankruptcy.
New York-based CIT last week said it had met the conditions for the offer, after it passed the 58 percent mark for the minimum tender.
CIT plans to use the proceeds from its emergency funding to complete the tender offer and make the payment on the August 17 notes, according to the filing on Tuesday.
The lender had already postponed its results, originally expected on July 23, while arranging the emergency funding. It said last month it expected a second-quarter loss of more than $1.5 billion.
CIT is still reviewing assets and businesses that it may sell as well as the related valuation adjustments that must be included in the quarterly report, it said on Tuesday.
CIT shares were down 30 cents to $1.18 in morning trade on the New York Stock Exchange after falling as low as $1.09 earlier in the session.