Insurance and financial services company
said Friday it would take an after-tax charge of about $350 million against
previously reported 1999 earnings. Conseco Finance is a unit of Conseco.
The Carmel, Ind.-based company, which has been suspected by several Wall Street firms of facing liquidity problems and of overvaluing its
interest-only securities, also announced that it had hired
to help advise the company on the sale of Conseco Finance.
Conseco said the charge would be taken against Conseco Finance's interest-only securities. The actual amount of the charge is to be determined prior to the conclusion of the 1999 audit, the company said. Conseco added that it had filed a request with the
Securities and Exchange Commission
to extend the required filing date of its 1999 Form 10-K to April 14, 2000.
Conseco fell 2 5/8, or 19.2%, at 11 1/16 Friday morning hitting a 52-week low. (Canseco closed down 2 1/4, or 16%, at 11 7/16).
The company said the sale of Conseco Finance, which was formerly known as
Green Tree Financial
, would allow it to focus on its core activities.
"We believe the time is right for Conseco to expand its role as the leading 'pure play' company in the insurance and investment industry focused on middle American consumers," Stephen C. Hilbert, chairman and chief executive of Conseco, said in a statement.
"As management and owners of 70 million shares collectively, it is our judgment that the interests of our fellow shareholders will be best served by seeking to divest the operations at this time," Hilbert added, referring to Conseco Finance.
Friday's announcements suggested that Conseco's problems could not be solved by moves the company announced in November. At the time, Conseco said it would increase its cash flow and reduce its debts by cutting its dividend, slashing loan growth and selling convertible preferred shares at a scant premium to buyout firm
Thomas H. Lee
. Those plans did little to buoy Conseco's share price, which has moved lower since the start of November, when the company's stock was at 23.