Updates stock price in paragraph 2
Sept 9 (Reuters) - B. Riley RILY.O aims to raise $410 million from two deals to fortify its balance sheet, as the investment bank looks to steady the ship after coming under pressure from a second-quarter loss warning and delayed quarterly filing.
Shares rose 12% on Monday after the company disclosed exclusive with a global asset manager to sell a 53% stake in its Great American Group.
The unit, valued at around $380 million in the deal, consists of B. Riley's appraisal and valuation services arm and its retail, wholesale and industrial solutions unit.
Separately, the bank has entered into a -binding commitment for a debt financing linked to the B. Riley and bebe brands businesses, expected to generate about $236 million in proceeds.
The strategic updates come as B. Riley fields a take-private offer from co-founder and co-CEO Bryant Riley. A special committee comprising independent directors is evaluating the proposal.
The stock has lost about 74% of its value so far this year, largely in August after the investment bank flagged a loss in the range of $435 million to $475 million for the quarter ended June 30, compared with a profit a year earlier.
The potential losses include a markdown of $330 million to $370 million related to its investment in Franchise Group (FRG).
B. Riley had participated in the management-led buyout of FRG last year, a deal that has since drawn the scrutiny of both its shareholders and regulators.
An external investigation and an internal review earlier this year cleared B. Riley of any wrongdoing related to the bank's dealings with FRG and Franchise's former CEO, Brian Kahn.
The deal was partly funded by a $600 million loan from a handful of lenders arranged by Japan's Nomura 8604.T.
B. Riley said it intends to use the proceeds from the two deals to pay down debt under its Nomura Senior Secured Credit Agreement.
B. Riley also could file its second-quarter report in time to meet the SEC's deadline, the third instance of a delay this year.
It said the hold-up was due to delays in finalizing the valuations of certain loans and investments.
(Reporting by Manya Saini in Bengaluru; Editing by Janane Venkatraman)
((Manya.Saini@thomsonreuters.com; X: manya__saini;))