In its latest effort to rebound from last year's credit quality problems, the Atlanta subprime lender Altiva Financial Corp. has signed a nonbinding letter of intent to buy Money Centre, a subprime lender in Charlotte, N.C.

Terms and price of the deal for the privately held company are still under negotiation, but Altiva's chief financial officer, J. Richard Walker, said he expects to reach a definitive agreement by Friday and to conclude the purchase by June 30.

Altiva Financial has been struggling to reestablish itself in the subprime market. This would be the second platform acquisition for Altiva, and Mr. Walker said it probably would not be the last.

"Our board has not given up on a growth-through-acquisition strategy," Mr. Walker said. "We will retain the Money Centre's business as an operating entity, and they will stay in Charlotte."

Altiva changed its name from Mego Mortgage Corp. in March and underwent a financial makeover last year after taking charges for poorly performing loan pools.

Altiva has laid off about 70 employees and sold about $50 million of common and preferred stock, including about $30 million bought by private investors.

Sovereign Bancorp of Wyomissing, Pa., and City National Bank of West Virginia, which is owned by City Holding Co. of Charleston, W.Va., each acquired 30% stakes in Altiva by buying $10 million in stock at $1.50 a share. About $37 million was raised by converting subordinated debt to preferred stock, Mr. Walker said.

"I consider them almost a new company since their recapitalization," said Brian Quinn, vice president of Duff & Phelps Credit Rating's financial services group, noting that Altiva is now building through acquisitions.

In January it bought the Nevada retail platform of Dallas-based FirstPlus Financial Group's consumer finance unit. FirstPlus, a specialist in high-loan-to-value loans, filed for bankruptcy protection in March.

Altiva retained the 70 employees of the unit, which originates $6 million to $9 million in nonconforming loans a month, Mr. Walker said.

Money Centre conducts business in 15 states, mostly on the East Coast. It made more than $400 million of loans last year. Adding its 200 employees would bring Altiva's employee base to about 275.

Mr. Quinn said that Altiva's strategy of acquiring origination platforms is driven by "what they can do, not what they want to do."

"They (Altiva) can no longer get funding from the securitization market, so that's left them with wholesaling," Mr. Quinn said.

"They are limited by this funding and can only grow so much unless they can get additional financing from outside investors."

Altiva said it needs to obtain financing for the cash portion of the purchase price and meet other closing conditions to complete the transaction.

The market is taking a wait-and-see-approach to Altiva. Its shares were at $2.4375 Wednesday. They had been at $5 on March 22.

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