Lloyds rebuilds with rights issue
LLOYDS Banking Group this week unveils the terms of its record £13.5billion cash call as it aims to strengthen its finances and avoid falling further into public ownership.
Details of the heavily discounted rights issue are going to be announced tomorrow ahead of a general meeting of shareholders in Birmingham to approve the move this coming Thursday. The £13.5billion share issue will see taxpayers pump an additional £5.8billion into the bank as the Government takes up its rights and keeps its stake at 43 per cent.
Analysts expect new shares to be issued at between 40p and 50p each, against Friday’s closing price of 88p.
The bank has 2.8million private investors, mostly from the stockmarket listing of the former Halifax building society which went on to be part of the HBOS group bought by Lloyds last year.
The rights issue is part of a £22billion fund raising that will also see the bank raise about £7billion through issuing bonds. The bank wants to avoid taking part in the Government’s asset protection scheme intended to insure against toxic debts.