interestrateripoff Posted December 14, 2009 Share Posted December 14, 2009 http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6955693.ece Lloyds Banking Group hailed its record-breaking £13.5 billion rights issue as a success this morning as it emerged 95 per cent of shares on offer were snapped up.The rights issue was part of a £22.5 billion plan to bolster the bank’s capital position and enable it to avoid further participation in the Government’s Asset Protection Scheme (APS), the costly state-backed insurance scheme for bad debts. Today's fund raiser was more successful than a £4 billion rights issue in June, when investors snubbed 13 per cent of the new shares on offer. The bank is 43 per cent owned by the Government. Eric Daniels, chief executive of Lloyds, said: “I would like to thank our shareholders for their considerable support for our capital raising programme. “Our focus remains on delivering on our plans to become the UK’s leading financial services company, which we believe will result in significant benefits for all our shareholders.” Shares in Lloyds edged up a fraction of a penny to 56.28p this morning. Shareholders were offered 1.34 new shares for each existing share at 37p. The rights issue was announced alongside an offer to exchange some debts for a new type of “contingent convertible” or “coco” bond , which converts to shares if the bank suffers fresh financial pain. Is this around the same value as the RBS share offering several months before RBS collapsed? I'm sure that won't happen this time around. Investors were told last April that the Royal Bank of Scotland (RBS) had a viable future when the company decided to make an emergency £12billion rights issue. Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted December 14, 2009 Share Posted December 14, 2009 Who underwrote it? , the tax payer? Quote Link to comment Share on other sites More sharing options...
dr ray Posted December 14, 2009 Share Posted December 14, 2009 (edited) I'm surprised by this. You would have thought shareholders would be wary after being shafted once by Lloyds and Brown. Now the government has even more control than when it forced Lloyds into a shotgun marriage. Short memories is the problem. Have people forgotten how Labour shafted them over Railtrack, BT, and British Energy? I steered clear Edited December 14, 2009 by dr ray Quote Link to comment Share on other sites More sharing options...
Timm Posted December 14, 2009 Share Posted December 14, 2009 Only took them six months to organise too. (see sig)... I wonder if this could be the last of the big rights issues? Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted December 14, 2009 Share Posted December 14, 2009 I'm surprised by this. You would have thought shareholders would be wary after being shafted once by Lloyds and Brown. Now the government has even more control than when it forced Lloyds into a shotgun marriage. Short memories is the problem. Have people forgotten how Labour shafted them over Railtrack, BT, and British Energy? I steered clear Shareholders love playing out the Marconi shuffle time and time again in the markets. And besides when it all goes pear shaped and theyve fallen another 90% what difference does it make to the pension fund managers Quote Link to comment Share on other sites More sharing options...
headrow Posted December 14, 2009 Share Posted December 14, 2009 I avoided them. Why would i want a share in a company that the majority shareholder is running a deficit of £178 Billion? The only bank i hold shares in is Standard Chartered , which like an idiot i bought into at about 900p just before they plummeted to the 600p mark . Quote Link to comment Share on other sites More sharing options...
pl1 Posted December 14, 2009 Share Posted December 14, 2009 Who underwrote it? , the tax payer? Who underwrites the underwriter? Quote Link to comment Share on other sites More sharing options...
porca misèria Posted December 14, 2009 Share Posted December 14, 2009 I avoided them. Why would i want a share in a company that the majority shareholder is running a deficit of £178 Billion? The only bank i hold shares in is Standard Chartered , which like an idiot i bought into at about 900p just before they plummeted to the 600p mark . So you must be sitting on a stonking profit by now. Without having had to dive in and out as with the bust banks. Quote Link to comment Share on other sites More sharing options...
ccc Posted December 14, 2009 Share Posted December 14, 2009 Isn't it really a forced hand from the Banks to the existing shareholders? Everyone knows their share price will fall once the new shares are issued. So if they don't buy the 'offer' their existing shares lose more value. If they do ? They get some more at what is deemed to be a 'fair' value. Then again - they have had to buy shares they probably did not want. Lose lose situation for the punter. Well unless the share price then shoots up. Not likely. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted December 14, 2009 Share Posted December 14, 2009 Isn't it really a forced hand from the Banks to the existing shareholders? Everyone knows their share price will fall once the new shares are issued. So if they don't buy the 'offer' their existing shares lose more value. If they do ? They get some more at what is deemed to be a 'fair' value. Then again - they have had to buy shares they probably did not want. Lose lose situation for the punter. Well unless the share price then shoots up. Not likely. For the big shareholders (especially the taxpayer), it's a problem. For small shareholders who can trade without swaying the market, it's an opportunity. I bought into the last Lloyds rights issue at thirty-something pence, so selling at 104p was a good profit. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.