SAN FRANCISCO -- Glenfed Inc. on Monday disclosed details of a restructuring aimed at raising up to $425 million in new capital and averting a federal takeover of its thrift unit.

But the big California thrift company admitted that it has not yet nailed down essential commitments from new investors to put in fresh equity. It also conceded that the plan would not bring its thrift unit into full compliance with regulatory capital requirements.

Glenfed, based in the Los Angeles suburb of Glendale, said it filed offering documents Monday with the Office of Thrift Supervision for a recapitalization.

Details of the proposal include: a $150 million rights offering backed by standby commitments from investors to buy unsold shares; a separate new equity offering of $125 million; a debt-for-equity exchange offer; and conversion of the holding company into a subsidiary of its thrift, Glendale Federal Bank.

The recapitalization is similar to one successfully carried out by Los Angeles-based rival California Federal Bank earlier this year, though that plan did not include a rights offering.

Glenfed, which has $17.8 billion of assets, needs to raise approximately $450 million, more than twice as much as California Federal did.

Glenfed chairman and chief executive Stephen J. Trafton touted the plan in an interview as an "attractive potential investment for those who want to participate in the California turnaround story." He said he was "gratified" by investors' interest in the plan, but declined to comment on any commitments.

To line up investors, Glenfed will have to demonstrate that "problem assets are manageable and the future earnings stream is believable," said David H. Ellison, manager of the Fidelity Select Home Finance Fund.

Tough Proposition

That could be tough, analysts said, given California's ongoing economic slumps and Glenfed's five consecutive quarters of operating losses.

Under the proposed rights offering, each 100 shares of Glenfed stock would be converted into four shares of Glendale Federal Bank stock plus 22 rights to buy additional Glendale shares. Approximately 15 million rights are expected to be distributed at an estimated subscription price of $10.

Glenfed is seeking standby investors to commit to buy at the subscription price any shares not sold through the offering.

The $125 million of additional equity Glenfed proposed to raised would consist primarily of convertible preferred stock.

Will Dilute Present Stakes

The recapitalization would substantially dilute ownership stakes of Glenfed shareholders, but the company warned that failure to approve the plan could result in seizure of its thrift.

Glenfed has lost about $450 million in the past three years. At March 31, its thrift's core and risk-based capital ratios stood at 2.76% and 5.73% respectively -- far short of the 5% and 10% levels regulators mandated it reach by the end of this month.

Even if the company raises the full $425 million, it said, it would still fall short of requirements. Glenfed said it has asked the OTS to extend the capital deadline. A spokesman, declining to discuss Glenfed specifically, said the OTS is flexible with thrifts that have a reasonable opportunity to rebuild capital.

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