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Tuesday January 15, 3:47 PMMizuho eyes 1.2 bln dlr injection into Merrill: reports
The bank is in the final stage of negotiations to purchase preferred shares in Merrill for about 140 billion yen (1.29 billion dollars) by the end of January, the evening edition of the Nikkei business daily reported. Japan's public broadcaster NHK said the amount would be around 1.2 billion dollars. If realised, it would be the first major purchase of shares in a US bank by a Japanese rival since the US financial system was hit hard by a slump in the mortgage market, NHK said. A Mizuho Corporate Bank spokesman said the bank had "no comment" on the news reports, which did not specify their sources. Major financial groups have been rocked by rising defaults on mortgage payments by "subprime", or high-risk US customers who were extended loans during the last housing boom. Merrill has already received cash infusions of up to 6.2 billion dollars from various investors, including 4.4 billion dollars by a Singapore state-owned investment group, as part of its efforts to survive the subprime crisis. But Merrill plans to seek additional investment to strengthen its capital base, the Nikkei reported, adding that the second round of cash injection will likely total about 700 billion yen. Merrill is scheduled to release earnings results for the three months through December on Thursday. The preferred shares to be purchased by Mizuho Corporate Bank, a key member of Japan's Mizuho Financial Group, will likely be convertible to common stocks, the Nikkei said. But the bank's stake in Merrill would probably be small even if the Japanese firm converts all the shares, the paper said. |
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