Barclays to employ 10,000 Lehman US staff; no respite for holders of $110 billion bonds
23 September 2008
Mumbai: The securities unit of Lehman Brothers opened its North American operations under its new owner Barclays, which has offered to employ over 10,000 of the stricken investment banker's US staff in the combined entity. (See: Barclays to pick select parts of Lehman for $1.75 billion)
The bondholders of the beleaguered Wall Street bank, however, stand to lose $110 billion as the asset-value of the fourth-largest investment bank in the US plummets.
Lehman Brothers bonds were hammered after the investment bank filed for bankruptcy protection and analysts see further losses on its derivatives positions, which are still being unwound.
Lehman got a new lease of life after the bankruptcy court for southern district of New York approved acquisition of its North American operations, which include fixed income and equity sales, trading and research, prime services, investment banking, principal investing and private investment management businesses, by Barclays.
Barclays acquired Lehman's North American investment banking business for $1.75 billion. But is yet to complete the integration process. Lehman's sales and trading business was not able to conduct business yesterday.
''Employment offers have been made to all employees of the Lehman Brothers businesses that have been acquired by Barclays Capital, including Lehman Brothers Private Investment Management business, transferring to Barclays Wealth, the wealth management arm of Barclays PLC,'' Barclays said in a statement.
While the combined firm would use the name Barclays Capital, the banking major has also acquired rights to use Lehman Brothers name as and where it fits.
''Barclays-Lehman Brothers partnership is now a reality. With all that our combined firm has to offer, we have a great business to tell our clients about. We have been delighted by the enthusiastic response of the senior Lehman Brothers executives to whom we have offered leadership positions in our combined firm," Barclays PLC president Bob Diamond said.