Firm Backed by Simon Wins Bidding to Buy 2 Ailing S&Ls; in State
A company backed by former Treasury Secretary William E. Simon and headed by former Federal Reserve Board Vice Chairman Preston Martin said Monday that it has received preliminary approval from federal regulatory authorities to acquire Bell Savings & Loan in San Mateo and Southern California Savings & Loan in Beverly Hills.
H. F. Holdings released a statement saying it has won the bidding for the two financially ailing institutions, both of which were declared insolvent and taken over by Federal Savings and Loan Insurance Corp. in mid-1985. Regulators put the two financial institutions up for sale about a year after they were seized.
Bell Savings and Southern California Savings are two of dozens of savings and loan firms nationwide that have been placed into what S&L; regulators refer to as the “management consignment program.”
They are S&Ls; whose net worths typically have been wiped out by bad investments but who have been kept open under new management while regulators determine how to sell the assets. To date, only a few of the problem institutions have been closed or merged into healthy S&Ls.;
H. F. Holdings plans to inject new capital into Bell Savings and Southern California Savings in the form of cash and long-term debt, similar to the package it put together last September for Honolulu Federal Savings, Martin said in a phone interview from Hawaii.
H. F. Holdings took over Honolulu Federal Savings in a regulator-assisted purchase by agreeing to pump as much as $60 million into the ailing S&L;, which is Hawaii’s largest thrift.
Martin said a final agreement to acquire Bell Savings and Southern California Savings is still weeks away. What remains to be negotiated, he said, is how much assistance in capital and loans will be provided by Federal Savings and Loan Insurance Corp.
Martin is chairman and chief executive of H. F. Holdings, while Simon is a major stock holder. Along with other private investors, the pair formed the holding company last year.
