Lloyds bank finally reveals terms of rights issue
Lloyds bank has today revealed the terms of its record £13.5 billion rights issue with the new shares being offered a discount of 59.5% to the prevailing share price. The rights issue shares will be priced at 37p compared to a price of 91p in the marketplace. This is a reflection of the enormity of the rights issue and the concessions which the company has been forced to give in order to receive full backing.
The £13.5 billion rights issue is now officially the largest in the UK having beaten the previous highest of £12.5 billion from HSBC in March. The issue is "fully underwritten" which effectively means that Lloyds bank has found investors to take up any shares left over from the rights issue, i.e. those which existing shareholders have refused to buy. In effect this means that the company will receive the £13.5 billion in question whether the additional shares are taken up by existing shareholders or the "underwriters".
Finally we should now see the company start to look ahead to the future rather than living in the past and attempting to undo a number of very difficult and very complicated situations. The share price has remained fairly steady at around 91p which is a good sign at this moment in time. If you are considering an investment in Lloyds Bank you must take professional financial advice as this article does not constitute investment advice.
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