Cummins to buy up to $25M in Irwin Financial stock

Engine maker Cummins Inc. said Tuesday it will buy up to $25 million of stock of Irwin Financial Corp. to support the Columbus, Ind., bank's restructuring plan.

The investment is contingent upon regulatory approval of the purchase and the restructuring plan, a Cummins spokesman said.

Irwin Financial said earlier this month that it planned to raise a total of $50 million in capital. Cummins said the bank's remaining $25 million capital raise will come from individual investors.

Cummins said the share purchase is both a good investment given the stock's "attractive" price and a vote of confidence in Irwin Financial's management.

"Given all the chaos in the financial markets, Cummins wants to help ensure that IFC's restructuring plan works," said Tim Solso, Cummins chairman and chief executive, in a statement.

Shares of Cummins fell $2.95, or 8 percent, to $36.13 in midday trading, while Irwin shares slipped 19 cents, or 6 percent, to $2.90.