US approves $ 13.9 bn sale of bankrupt bank IndyMac

WASHINGTON: The US government has approved the sale of bankrupt California bank IndyMac to investment group IMB Management Holdings for about USD 13.9 billion.

The Federal Deposit Insurance Corporation (FDIC) said it had signed a letter of intent on Wednesday to sell IndyMac Bank, which it seized in July when the bank collapsed under the weight of a bank run by depositors panicked about its viability.

The bank had been under pressure from a cash crunch amid the subprime mortgage crisis and the collapse of the housing market.

The FDIC said it had agreed to sell IndyMac to IMB HoldCo, a thrift holding company controlled by IMB Holdings.

IMB HoldCo is owned by a consortium of private equity investors led by Steven Mnuchin of Dune Capital Management, the FDIC said in a statement.

Mnuchin will be chairman and chief executive of IMB HoldCo.

The consortium includes J.C. Flowers & Co., Paulson & Co., and MSD Capital, a private investment firm created to exclusively manage the capital of Dell computer founder Michael Dell and his family.

IndyMac was among the 25 US banks that failed in 2008 and, with USD 32 billion in deposits, was the second-largest bank bankruptcy after Washington Mutual, acquired by JPMorgan Chase.

The new bank, dubbed New IndyMac, is headquartered in Pasadena, California, and has USD 6.5 billion in deposits and 33 branches in the Los Angeles area.