Brushing aside billionaire investor Carl Icahn's 11th-hour effort to scupper the process, CIT Group Inc. (CIT) said Wednesday it raised an extra $4.5 billion as it presses ahead with its restructuring plan.

The embattled lender to around 1 million small and midsize businesses said it would add the $4.5 billion to a $3 billion loan put in place by a group of the firm's largest bondholders in July.

CIT's announcement comes less than 24 hours after Icahn, who is CIT's largest bondholder, upped the ante on the firm's reorganization plan, giving the company less than an hour to respond to his offer to provide $4.5 billion in loan financing while threatening to sue the firm if it went with the rival bondholder loan.

"As a result of the lack of evidence that Mr. Icahn has arranged sufficient funding at this time, CIT's Board of Directors determined that the best interests of the Company and its stakeholders would be served by proceeding with the credit facility provided by a diverse group of lenders," CIT said in a written statement.

Icahn asserted that his loan would have saved the company $112.5 million in fees.

Holders of some $31 billion in bonds have until 11:59 p.m. EDT Thursday to exchange their debt for a mix of new bonds that mature later and preferred stock in a reorganized CIT. The company hopes cut its debt by at least $5.7 billion.

Some 50 of CIT's bondholders are lenders to the extra $4.5 billion in financing, which matures in January 2012, people familiar with the matter have said previously.

If the century-old firm doesn't get enough support for the exchange offer, it plans to restructure through a prepackaged bankruptcy, which would allow it to reorganize within a couple of months.

If the company's plans fail and it has to be liquidated, CIT said last week that bondholders may get as little six cents on the dollar.

CIT is offering bondholders 70 cents on the dollar plus equity in the reorganized entity if they vote in favor of a prepackaged bankruptcy. If they agree to the exchange offer, bondholders can get as much as 90 cents on the dollar of new debt plus some equity.

Icahn, who owns $2 billion of CIT's bonds, believes bondholders could potentially get back all of their investment in a traditional bankruptcy. On Tuesday morning, he announced a 30-day tender offer to buy bonds from CIT's smaller bondholders at 60 cents on the dollar if they help him block the firm's reorganization plan.

"The Icahn proposal would assure the common shareholders receive nothing, as would the prepack plan," said Michael Taiano, an analyst at Sandler O'Neill & Partners in New York. "If Icahn has his way, it would in all likelihood end any chance CIT has to re-emerge as a bank-like entity." Icahn didn't immediately respond to CIT's announcement.

In a second statement later Wednesday afternoon, CIT said it would accelerate changes to its board of directors in a potential prepackaged bankruptcy scenario.

"Immediately upon effectiveness of CIT's plan of reorganization, a majority of the directors will be individuals who were identified by bondholders," CIT said in this statement. In this instance, the board will consist of 13 directors, including 12 independent directors and the chief executive. Four of these directors will be identified by CIT's steering committee of bondholders, while three will be chosen by bondholders who are not members of the steering committee, according to the statement.

CIT believes it has "broad support" for its restructuring plan among both large and small bondholders. But Icahn's offer to provide downside protection to smaller bondholders may be tempting to some of these investors.

Indeed, Victoria Lytle, a retired research scientist based in Anchorage, Alaska, described her choices under CIT's reorganization plan as "dismal."

"For someone who wants the stable retirement income--Icahn's offer is my best bet," she wrote in an email to Dow Jones Newswires.

Even if Icahn fails to derail CIT's plans, he is unlikely to go away quietly.

"Icahn is making last-ditch efforts to derail CIT's plan. It's not really surprising that it's come down to the wire," said Taiano.

CIT's shares closed up 10% at $1.06.

-By Kate Haywood, Dow Jones Newswires; 212-416-2218; kate.haywood@dowjones.com