American Capital Reports $547 Million Q2 Loss

(Reuters) – American Capital Ltd (ACAS.O), a provider of financing to small- and mid-sized businesses, on Tuesday posted a $547 million second-quarter loss, and said it remains in default on $2.3 billion of financings.

Shares of the company fell 55 cents, or 15.2 percent, to $3.06 in after-hours trading following the announcement.

The loss equaled $2.52 per share, and compared with a year-earlier loss of $70 million, or 34 cents per share, for the Bethesda, Maryland-based company.

Net operating income fell 86 percent to $20 million, or 9 cents per share, from $145 million, or 71 cents.

Chief Executive Malon Wilkus in a statement said American Capital “continues to face challenges” even though the economy is recovering. He said the company remains focused on resolving the defaults with its unsecured creditors.

American Capital has struggled because the recession has reduced the values of companies to which it makes loans in return for equity stakes. As a result, it becomes harder for American Capital to operate the companies, or sell them except at distressed prices.

Five months ago, American Capital revealed that its auditor had issued a “going concern” warning, indicating uncertainty over whether the company remained viable.

On Tuesday, the company said it believes it has sufficient liquidity to meet scheduled debt amortization and investment needs within its portfolio.

American Capital shares closed regular Tuesday trading up 4 cents at $3.61 on the Nasdaq. (Reporting by Jonathan Stempel; Editing Bernard Orr)