Merrill Lynch to keep World Financial Centre base as new CEO John Thain starts clean-up

09 January 2008

Mumbai: Merrill Lynch & Co Inc, which took an $8.4 billion third quarter write-down on its mortgage-backed assets, is likely to renew its headquarters lease in Manhattan's World Financial Center, the Wall Street Journal reported.

Merril has not signed the five-year renewal lease with Brookfield Properties Corp, landlord of the World Financial Center complex, and the deal could still fall apart, the report added.

John Thain, the company's new chief executive, who was risk management head at rival Goldman Sachs, may also find it an uphill task to repair 94-year-old Merrill.

While Goldman Sachs Group Inc. emerged from the sub prime crisis relatively unscathed, Merrill Lynch had to take a huge write-down on its mortgage-backed assets. The loss also cost Thain's predecessor, Stan O'Neal, his job. (See: Stan O''Neal Merrill Lynch''s beleaguered CEO to go)

O'Neal, 56, had already cut more than 18,000 jobs and closed 250 Merrill Lynch offices when the market faltered in 2001 and 2002.

Thain, who became the new chief executive last month, is moving swiftly to restore order. He plans to create an executive committee of business heads whose members will report directly to him. Prominent on the committee will be a chief risk officer leading a reorganised unit.