HSBC rights issue a success
by Gill Montia
Story link: HSBC rights issue a success
HSBC has reported that its £12.5 billion rights issue has been a success.
The take-up from investors stands at 96.6%, or 4.89 billion shares.
The new stock was priced at 254p a share and therefore heavily discounted on Friday’s closing price of 434p.
The bank, which is Europe’s biggest by market value, announced the fundraising in March when it reported a 62% fall in profit for 2008, to £6.5 billion.
Chairman Stephen Green said the additional capital would enable the group to deal with the impact of an uncertain economic climate although HSBC may, in addition, seek out some of the assets that are being shed by failing financial institutions worldwide.
According to a report in The Times, the bank intends to elevate its Middle East operations from 10% of its global business to 15% this year.
The fundraising, which has brought in £12 billion so far, holds the record for the largest rights issue in UK corporate history and will leave the bank with a Tier one capital ratio of 8.5%.
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