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Report: Doral Financial To Raise $700 Million In Asset Sale; Stock Spikes

John Seward

Doral Financial Corp. (NYSE: DRL) spiked sharply Wednesday after a report that the Puerto Rican retail banking company is trying to raise capital through asset sales.

Citing unnamed sources the Bloomberg report said Doral wants to sell its commercial real estate business as well as branches and loans in New York and Florida. The combined assets may be worth $700 million, the report said.

Earlier this month the money losing Doral sold non-performing assets for $369 million: In May said its revised capital plan may "include a sale of certain performing and non-performing assets and businesses."

Doral is facing a deadline later this month to raise capital to replace a $230 million tax refund it says is owed by the Puerto Rican government.

In April, the Federal Deposit Insurance Corp. said Doral can no longer use the missing refund to cover capital requirements, and gave the bank 120 days to replace the amount.

On Tuesday, a Puerto Rican court set a pre-trial hearing on Aug. 11 for Doral's suit that seeks to pry loose the refund.

Doral traded recently at $5.69, up nearly 5 percent.

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