SAN FRANCISCO -- Citadel Holding Corp. said it has reached agreements with institutional investors to spin off an 80% stake in its Fidelity Federal Bank unit, a key element in a previously announced plan aimed at recapitalizing the ailing thrift.

As a result of the agreements, Fidelity Federal, Glendale, Calif., is expected to receive a $108 million equity infusion from the sale of 21.6 million shares to the investors, who were not identified. J.P. Morgan Securities is Citadel's adviser and placement agent in the transaction.

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