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UPDATE 1-Penson quarterly loss widens; restructures debt
March 13, 2012 / 9:21 PM / in 6 years

UPDATE 1-Penson quarterly loss widens; restructures debt

* Enters debt reduction plan

* Q4 loss from cont. ops $6.68/shr

* CFO Kevin McAleer to retire

March 13 (Reuters) - Penson Worldwide Inc posted its seventh straight quarterly loss, and the securities clearing firm said a majority of its debt holders have agreed to a restructuring support agreement.

The agreement will provide for the reduction of its debt through an exchange offer for new debt and equity securities.

For the fourth quarter, the company posted a net loss from continuing operations of $6.68 per share on revenue of $42.7 million, and said its continuing operations were affected by lower industry-wide trading volumes and securities lending, following MF Global’s bankruptcy last year.

Penson also said its Chief Financial Officer Kevin McAleer will retire, and appointed Michael Chochon to replace him after the company’s financial reporting for 2011 was complete.

Last year, the company announced plans to sell its Australian subsidiary to BNY Mellon’s Pershing unit and close its UK operation, after it said it would restructure itself.

“Under the (debt reduction) plan, we would eliminate approximately $176 million of debt and $30 million of annual cash interest expense ... our plan is to get Penson to be as close as possible to break even on a cash basis in the second half of 2012,” chief executive Philip Pendergraft said in a statement.

Dallas-based Penson said its U.S. unit Penson Financial Services Inc. had more than five times the minimum requirement of regulatory capital, at $143 million.

Penson’s shares closed at $1.27 on Tuesday on the Nasdaq.

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