NovaStar announced that Wachovia Bank has cut down the minimum net worth that the company must maintain by 71 percent, which reduces the amount from $517 million to $150 million. This brings some relief to the company after the crisis in the mortgage market, which had led to the closure of its retail and wholesale lending operations.
NovaStar announced that it will not be able to go ahead with its plan to sell rights to purchase $101.2 million of convertible preferred shares. Instead, the company plans to cut retail lending jobs and close retail origination offices in order to preserve cash.
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