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Deals of the year: North America


Western Europe         Central & Eastern Europe        Asia        Latin America


 

Best M&A/restructuring
Providian
Date: November 2001 to July 2002
Advisers: Goldman Sachs, Salomon Smith Barney


Credit card squeeze: worst S&P 500
performer in 2001, Providian
restructured out of serious problems



Providian was the worst performer in the S&P 500 for 2001. Having stood at $59.20 at the end of June, the share price for the US credit card company hit a low of $2.01 at the start of November - a decline of almost 97%.

The problems first manifested themselves when the company reported in its second-quarter earnings in July 2001 that it had been forced to increase write-offs for bad loans.

Providian had relied too heavily for its growth on sub-prime borrowers and was paying the price. Over the next few months the company had to modify earnings guidance and outlook a number of times and for the fourth quarter it reported a loss of $0.76







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