British bank RBS seeks record $24bln from shareholders

0 Comments | AFP, April, 2008

LONDON (AFP) — Britain's Royal Bank of Scotland announced on Tuesday a record share issue of almost 24 billion dollars to shore up its finances after huge subprime-related writedowns and its ABN Amro takeover.

"The proposed rights issue will raise proceeds of 12 billion pounds (15 billion euros), net of expenses," Britain's second-biggest bank said in a statement announcing the country's largest-ever issuing of new stock.

A rights issue gives current shareholders the opportunity to buy new shares in a company, often at a big discount, in order to boost capital reserves.

The news came one day after the Bank of England announced a massive credit-crunch package, worth nearly 100 billion dollars, aimed at getting British banks lending again.

RBS said...