Mercury Finance Co. is seeking to sell off some of its assets in an effort to raise cash, sources said Tuesday.

Acting at the request of its lenders, the embattled subprime auto finance company has asked Salomon Brothers to handle the possible sale of some of its car loans, sources said.

The company is also looking into a sale of its insurance and credit card operations, its new chief executive, William A. Brandt Jr., told Dow Jones New Service.

Other finance companies have already expressed an interest in buying some of Mercury's assets and spent Tuesday afternoon scrambling to submit bids, sources said. Likely buyers include Ford Motor Credit's newly formed subprime lending subsidiary, Fairlane Motor Credit LCC.; GE Capital Corp.; Household Finance Corp.; and Beneficial Corp., observers said.

"There's a large rush on by a lot of finance companies who are interested in bidding for some of these assets," one source said. Because it lends to borrowers with less-than-stellar credit, Mercury's auto loans generate attractive returns.

Lake Forest, Ill.-based Mercury failed on Friday to meet a $17 million payment on its commercial paper. Another $100 million in commercial paper payments are due this week.

The company continued talks with its lenders on Tuesday to secure short- term financing. Mercury's top creditors are said to include BankAmerica Corp., Banc One Corp., NationsBank Corp., First Chicago NBD Corp., and J.P. Morgan & Co.

These banks had provided a $500 million back-stop for Mercury's commercial paper program, but withdrew those funds last week when the company said it had overstated its earnings.

Market sources suggested that the lenders are now pressuring Mercury to sell some of its assets to help bring the company's short-term financing needs into focus. Earlier this week, Mr. Brandt said publicly that the company needed $12 million to $15 million by Tuesday to ease its liquidity crisis. But some lenders fear Mercury needs more, sources said.

Another industry observer speculated that by conducting an asset sale Mercury was preparing to file for protection from creditors under Chapter 7 of the bankruptcy code, which provides for an orderly liquidation of assets.

Subprime lenders pointed to Ford's new division as a likely acquirer of Mercury's loans.

"That would be a jump-start to their portfolio," noted another subprime lender. The Denver-based Ford unit is scheduled to begin operations this spring.

A Ford spokeswoman said that the company was not considering purchasing Mercury loans at this time.

Because they are originated and serviced through regional branches, Mercury's auto loans are considered sound assets, analysts said.

"There is not an asset quality problem with Mercury's loans," one analyst said. A finance company that bought loans from the company would probably hire managers from Mercury's branches to manage their new portfolios, he added.

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