Loan Deal
CIT Group Inc. is being thrown a lifeline by billionaire financier Carl Icahn, who is the group’s largest creditor. Icahn, in a letter to the board, said he would extend the struggling financial group, on the verge of bankruptcy, a $6 billion loan. The loan would not force bondholders to vote for a revised debt exchange structured to save the company, which is one of the biggest lenders to small businesses, including apparel companies. CIT said it needed more information about the loan proposal. CIT Group does have a pre-packaged bankruptcy restructuring plan in place if its refinancing efforts fail. In a recent Securities and Exchange Commission filing, CIT noted that even with a proposed debt swap in place with bondholders, it may still have to file for Chapter 11 reorganization. The company said it could possibly emerge from bankruptcy within two months after a filing.
