SAN FRANCISCO -- Federal regulators have granted ailing Glenfed Inc. what it needs most: time.

The company said Wednesday that the Office of Thrift Supervision extended for 18 months the deadline for its principal unit, Glendale Federal Bank, to lift its regulatory capital ratios. The deadline had been June 30.

It also approved a plan submitted by Glenfed to raise between $375 million and $425 million in capital by Aug. 31.

The extended deadline, which lifts the near-term threat of a takeover of the nation's fifth-largest thrift, was a condition of Glenfed's recapitalization.

The company, which was $17.8 billion of assets, must now persuade investors to sink cash into an operation that has lost more than $400 million over the last three years.

The new timetable is "a plus, but it doesn't mean they're out of the woods," said E. Gareth Plank, an analyst with Mabon Securities.

Branch Sales

In a related move to trim operations and build capital ratios, Glenfed's chairman and chief executive, Stephen J. Trafton, confirmed that the company will sell branches.

He did not elaborate, but a well-placed source said Glenfed, based in Glendale, Calif., may be near a deal to sell its 60 Florida branches.

A spokeswoman for the thrift declined to comment on possible sales in Florida. But she denied speculation that Glenfed's Seattle-based University Savings Bank is on the block.

Amending a previously imposed order, the OTS gave Glendale Federal unit the end of 1994 to build core capital to 5% of assets and risk-based capital to 10% of assets. Those levels must be at 4.5% and 9.0% by the end of September.

At the end of March, Glendale Federal's core- and risk-based capital levels were at 2.76% and 5.73%, respectively.

The company's recapitalization plan calls for Glenfed to be merged into its thrift subsidiary. Other parts of the plan include a debt-for-equity exchange offer, a $250 million to $300 million shareholder rights offering, and a $125 million preferred stock offering.

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