ATLANTA -- A group of lenders led by Chase Manhattan Corp. could gain control of nearly half of troubled Hibernia Corp. as the result of a recapitalization agreement announced Thursday.
Hibernia, a New Orleans banking company that lost $129.9 in the first nine months of 1991, said it had agreed in principle with Chase and six other banks to restructure $85 million in existing debt plus $10 million in deferred fees and interest.
Those sums will be converted into 21.8 million shares of noncumulative convertible preferred stock; $22.5 million of senior secured debt; $12.5 million of unsecured subordinated debt; and warrants to purchase 1.8 million common shares.
The agreement, which requires shareholders approval and modification of Hibernia's charter, clears the way for the company to sell its $1.2 billion-asset Texas bank, an essential element in its plan to regain profitability. Hibernia has $6.2 billion of total assets.
After conversion of the preferred stock and exercise of the warrants, the creditor group would own about 46% of Hibernia at a price equivalent to about $2.75 a share.
Hibernia shares closed Wednesday at $2.125. The stock rose 50 cents by late Thursday after the recapitalization announcement. Analyst Frank Anderson of Stephens Inc. in Little Rock, Ark., viewed it as a "positive move" even though it had been expected.
In late October, Hibernia revealed a $25.1 million third-quarter loss and siad the lender group had extended their repayment deadline to April 30 from Oct. 31.