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Lloyds bank set to confirm fund-raising details

Lloyds bank will this week confirm details of a record-breaking £13.5 billion fund-raising which will see UK taxpayers pumping in almost £6 billion of extra capital in exchange for shares. The additional funds in question will come from ordinary shareholders and bondholders who are also being brought into the fold with regards to this massive reorganisation of the Lloyds bank balance sheet.

It is believed, after studying comments from Lloyds bank, that the new rights issue shares will be priced at a 38% to 42% discount to the prevailing share price which would indicate a price in the region of 33p. This is a long way from the heady highs of £10 plus which the Lloyds bank share price reached some years ago but reflects the massive change in the UK banking sector over the last two years.

Analysts believe that the fund-raising will allow the company to draw a line underneath recent problems and eventually begin to look forward rather than backwards. While many shareholders have lost significant amounts of money because of the fall in the share price, there would appear to be wide scale support for the rights issue which, with the support of the UK government, would appear almost certain to succeed.

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