NEW YORK (Thomson Financial) - First Marblehead Corp. Monday said it is
taking steps to reposition itself in a volatile student loan market, including
further reducing operating expenses related to its student loan business.
Under the plan, the company expects to lower operating expenses by about
$200 million a year, and has eliminated 500 jobs at all levels, including
management and executive positions.
The company cited the unexpected voluntary bankruptcy petition by Education
Resources Institute, a company client's decision to exit the private student
loan industry and terminate its relationship with First Marblehead and the
continued disruption in the capital markets as reasons for its plan to reduce
expense.
Going forward, First Marblehead said it will leverage its marketing
coordination services, processing, and capital markets expertise to facilitate
its planned transition into a diversified education finance products and
services company to serve students and their families.
"We believe that the private student loan market will continue to fill a
vital niche in helping students achieve their education dreams," First
Marblehead CEO and President Jack Kopnisky said in a statement.
First Marblehead shares rose 4.2% to $4.02 in morning trading.
Christie Rizk
cr/vj
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