Swiss bank UBS is hoping to raise CHF16 billion (£8 billion) in a rights issue to rebuild its capitalisation following huge subprime-related losses.
Shareholders will have the option to buy seven new shares for every 20 held at CHF21 (£10.33), around a third below their market value of CHF30.64 (£15.08) per share, as of yesterday.
UBS was the worst affected of all the European banks, and has written off around £19 billion so far.
Yesterday, the bank closed a deal with BlackRock to offload approximately £11 billion in 'toxic' assets at the heavily discounted price of £7.6 billion – part-financing the deal itself with a £5.7 billion loan to BlackRock.
UBS shares fell one per cent in Swiss trading by 09:30 BST to CHF30.34 (£14.93). Over the past year, the bank's value has fallen by 59 per cent.
The bank announced earlier in the year it will cut up to 5,500 jobs to cope with the huge losses it has incurred since the subprime crisis hit. The job losses are expected to go through by mid-2009.
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