RBS rights issue flops
Just 0.25 per cent of new stock has been sold in the latest rights issue from RBS.The bank had signed up to the government's £37 billion recapitalisation scheme, which sees the Treasury using public money to take out equity stakes in banks whose stability is under threat from the credit crunch.Under the terms of the plan, RBS launched the rights issue on signing up to receive up to £20 billion of this money.All unsold stock is to go to the government - who are now to own a 58 per cent stake in the bank.The firm's languishing share price - which stood at 54.7p on Tuesday when the rights issue closed, 10p under the sale price - is largely to blame for the low sales.RBS chief executive Stephen Hester said: "We regret that existing shareholders did not take up their pre-emptive rights but understand that market sentiment toward the banking sector made this uneconomic in the short term."There remain substantial uncertainties and challenges outside our control but for our part the job is underway."RBS shares closed at 54p yesterday, around 17.5 per cent under the rights sale price.
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