Posted by: Stacy Perman on October 19, 2009
Here comes another turn in the ongoing saga of embattled CIT Group: billionaire investor and corporate rattler Carl Icahn, a CIT bondholder, sent a letter to the company’s board of directors today offering a $6 billion loan. According to the AP, Icahn said his loan would save the company $150 million in fees while criticizing CIT’s board for its restructuring bid, calling it a deal that favored large bondholders at the expense of small investors – and undervaluing the company.
Icahn’s proposal comes just days after CIT offered bondholders a debt swap – current debt for debt that matures at a later date as well as some stock. It also comes on the heels of last week’s announcement that CEO Jeffrey Peek would step down by the end of this year – an announcement that arrived one month after CIT said it was extending Peek’s contract until 2010.