CIT Group Inc. rose nearly 30 percent as it completed its exit from all of its home lending business on Tuesday, with two separate sales, noting that it wants to focus on commercial finance.
The New York-based firm has agreed to sell its home lending business to Lone Star funds for $1.5 billion in cash which is also assuming $4.4 billion in debt and other liabilities.
CIT said in a statement Tuesday that it expects a pretax loss of about $2.5 billion from the sale. The sale is expected to complete in July.
The company also said it agreed to a separate sale of its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc for about $300 million.
CIT noted that the transactions represent a step to reduce the company's risk and enhance its liquidity as it looks for profitability.
Since April 1, the company has raised $1.6 billion in capital and financed another $1.5 billion backed by assets. It has also sold more than $2 billion of assets and obtained a $3 billion long-term financing facility from Goldman Sachs. The company has also retired $5.3 billion in debt.
Shares of CIT rose $2.02, or 29.66 percent, to $8.83.