B&B sells 27.84% of rights issue

19-08-2008

B&B sells 27.84% of rights issue
Bradford & Bingley said more than a quarter of the shares offered as part of its rights issue have been taken up by shareholders.

Bradford & Bingley (B&B) is the latest bank to bolster its balance sheets with a £400 million rights issue, selling 27.84 per cent of the shares.

Although the 27.84 per cent uptake was not as impressive as Royal Bank of Scotland, which raised £12 billion, B&B has beaten HBOS, which only persuaded eight per cent of investors to take part in its rights issue.

The underwriters, Citi and UBS, will have until August 22nd to find subscribers for the remaining shares, or they and the sub-underwriters will have to buy them themselves.

The sub-underwriters include several high street banks including HSBC, Lloyds TSB, HBOS, Barclays, Abbey and Royal Bank of Scotland.

B&B also announced today it has appointed former Alliance & Leicester head Richard Pym as its new group chief executive.

Mr Pym said: "Bradford & Bingley has developed strong customer franchises in savings and lending and I am delighted to have been invited to lead the business. I look forward to working with the board and executive team in building a successful future."

B&B had initially priced the rights issue at 82p a share in May to shore up its finances, in addition to securing a private equity investor to buy 23 per cent of the bank.

As the biggest buy-to-let lender in the UK, B&B had been hit by the property slowdown and needed to improve its capital reserves.

However, as the economic situation worsened, B&B's investor Texas Pacific pulled out and the bank's share price continued to fall.

B&B responded by lowering its rights issue price to 55p a share to encourage shareholders to take up the offer.

The bank said there has been no material change in the current trading and outlook of the company since a trading statement in June. B&B said it will release interim results on August 29th 2008.

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