GMAC Financial Services may buy a non-U.S. lender to combine with its struggling Residential Capital, and GMAC managers plan to inject money to keep the struggling mortgage lending unit afloat, ResCap said Wednesday.
ResCap’s net worth has been drifting downward to $6.2 billion as of the end of September. Its lending agreements require it to keep a net worth of $5.4 billion.
GMAC management “currently intends to take steps, to the extent necessary, to cause ResCap to be in compliance with all of the consolidated tangible net worth covenants contained in its credit facilities,” including contributing money, ResCap said. But it warned that there is no guarantee that GMAC’s board will sign off on the financial help.
GMAC is owned by an investment group led by Cerberus, and General Motors still owns a 49 percent stake.
ResCap also said GMAC has submitted a second-round, non-binding “indication of interest to acquire a large non-U.S. mortgage lending institution.” ResCap said GMAC’s plan if it makes the acquisition is to fold ResCap’s mortgage business into the acquired entity.