Finova Group Inc., a commercial finance firm that has struggled with rising loan losses and profit disappointments for more than a year, may have gotten a reprieve Monday.

Leucadia National Corp. agreed to put $350 million into the Scottsdale, Ariz., firm. The investment would give Finova some breathing room as it attempts to negotiate new terms for $1.6 billion of debt that is to come due in May. It would also give Finova more flexibility to wind down certain businesses, including corporate finance and business credit.

Executives from Leucadia, a New York financial services holding company, were not available for comment, but observers expect it to be an active investor, perhaps going so far as to shake up Finova's management.

Finova, which specializes in financing for middle-market companies, has been under increasing pressure from creditors and investors after a string of losses and profit shortfalls.

Last year the company had to restate prior-year earnings after dropping gain-on-sale accounting. In March its long-time chief executive officer, Samuel L. Eichenfield, resigned amid concerns over credit quality. The company hired Credit Suisse First Boston to help it explore strategic options.

Earlier this month Finova hired another adviser, Jay Alix & Associates, to help create a financial plan, including the reorganization of its bank debt.

"This agreement follows due diligence by Leucadia National and is the culmination of our strategic review process," said Matt Breyne, Finova's president and chief executive officer, in a statement Monday. "We expect to work quickly with Leucadia and Jay Alix & Associates to present a comprehensive plan to our bank group."

Leucadia has a history of taking stakes in troubled companies and helping to steer them to firmer ground. It was to play fairy godmother to Reliance Group Holdings this year, pledging to inject $1.03 billion in the debt-laden New York commercial insurer. That deal fell apart during the summer, leaving Leucadia with capital to invest.

Bankers who arranged a $237.5 million loan for Reliance that came due on Friday agreed to extend the loan indefinitely, helping Reliance to avoid bankruptcy.

Analysts said they would expect Leucadia to exert its influence on Finova without taking over direct, day-to-day management.

"I think they will be more active than passive," said Blaine Frantz, an analyst at Barclays Capital. "They may not run the day-to-day operations, but I would not be surprised to see Leucadia affect some management changes. It could certainly occur at the CEO level."

Leucadia agreed to buy 10 million shares of new convertible preferred stock for $250 million. Finova will also issue to Leucadia a 10-year warrant to purchase up to 20% of Finova's outstanding shares for $125 million.

The agreement is contingent upon a "satisfactory" arrangement between Finova and its bankers and regulatory approvals, the companies said.

Equity analysts called the deal an expensive one for Finova shareholders. Michael Vinciquerra, an analyst at Raymond James & Associates of St. Petersburg, Fla., who upgraded his rating on the stock Monday to "market perform" from "underperform," said the deal showed how difficult it was for Finova to raise capital.

The company had to give away about three-quarters of itself in order to stay alive, Mr. Vinciquerra said. Ultimately, there will be 200 million Finova shares in the market, up from 61 million. The deal, because of the way it is structured, is a dilution for current shareholders, he said.

Some bond analysts sounded relieved by the deal. "This is a lifesaver, literally, a lifesaver," said Stephen Moyer, an analyst at Imperial Capital LLC. Before the deal was announced, there was "a 50% probability this company would have to file" for bankruptcy by May, he said.

If the deal goes through and bank lenders extend the loans' deadlines, "this company has a shot of recovering," Mr. Moyer said. While Finova probably can't increase its balance sheet, it can manage to control how it cuts back, he said. The company can reduce its assets 14%, to $10 billion, within 18 to 24 months, he predicted.

More details of the agreement are expected today, when Finova releases its earnings report.

Some observers said the company is still not out of the woods yet. "I would certainly view it as a positive, but it is not the endgame for Finova," Mr. Frantz said. While the capital commitment will help the company move through immediate stresses, such as loan payments, "long-term uncertainty with respect to the viability of the company" still exists, he said.

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