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Transamerica Puts L.A. Consumer Unit on the Block

Finance: The loan provider also plans to sell some real estate assets as it struggles with declining earnings.

March 14, 1997|From Times Wire Services

Transamerica Corp., plagued by falling profit, said Thursday that it has put its Los Angeles-based consumer finance business and some of its real estate holdings up for sale.

The San Francisco financial services company wants to sell a unit with 420 offices in 44 states and $3.6 billion in loans and other receivables. It also wants to sell or liquidate $550 million in real estate loans and properties, the company said in a statement.

The sales are part of a plan to shift to selling consumer loans through a centralized lending operation instead of relying on branches, which are expensive to operate. Consumer lending has weighed on Transamerica's profit, helping push overall earnings down 3.4% in the fourth quarter.

Transamerica plans to use the proceeds from the sale to pay off debt, fund the new centralized lending operation and buy back stock.

The company's shares rose $1.875 to close at $90 on the New York Stock Exchange.

Transamerica's consumer lending profit dropped to $7.5 million in the fourth quarter from $22.7 million in the same period in 1995 because of higher operating costs associated with reorganizing that business.

The company's real estate profit dropped to $7.9 million from $12 million because of increased costs to restructure the real estate tax service.

Transamerica, with assets of about $50 billion, sells financial and life insurance products. Its other business include commercial lending, leasing and real estate information services.

Goldman, Sachs & Co. was hired to assist in the sale, which is expected to close by the end of the second quarter, Transamerica said.

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