Ford Unit Will Purchase Huntington Auto Lender

The troubled parent of Huntington Beach-based Triad Financial Corp. has agreed to sell the auto lender to a unit of Ford Motor Co. to help it pay off debt.

New York-based ContiFinancial Corp. said Monday that it will sell Triad, which makes car loans to people with spotty credit records, to Fairlane Credit LLC. Fairlane is a unit of Dearborn, Mich.-based Ford Credit Co., Ford’s finance subsidiary.

ContiFinancial didn’t disclose the sale price but said it will result in about $125 million in proceeds, debt reductions and restored access to credit lines. The company plans to use $90 million to pay off more debt.

Triad, which employs about 350 people in Orange County, has a loan portfolio of $555 million and makes loans through 3,500 auto dealers in 33 states. Officials said the company is expected to retain its headquarters in Orange County. No layoffs are expected.

ContiFinancial is trying to reduce its debt to stave off bankruptcy after suffering losses. It’s also trying to forge an agreement to sell itself to Residential Funding Corp., the mortgage unit of General Motors Corp.’s finance subsidiary, General Motors Acceptance Corp.

ContiFinancial, 78% owned by Continental Grain Co., has said its survival depends on renegotiating, extending and refinancing its loans, and it probably won’t be able to do that unless its sale to Residential Funding or another company goes through.

The company last week said it expects to lose $247 million before taxes in its fiscal fourth quarter, its third consecutive quarterly loss. The loss for the period ended March 31 is largely the result of write-downs on securities backed by interest payments on mortgages. It’s also writing down the value of commercial real estate loans that it plans to sell.