Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Banco Popular Sets Steep Discount for Big Rights Issue

11/10/2012 | 06:31am US/Eastern
Recommend:
0
   By Ilan Brat 
 

MADRID--Spain's Banco Popular Espanol SA (>> Banco Popular Espanol SA) said Saturday it would issue a huge amount of new shares to investors at a steep discount to its current price to avoid having to take state aid.

The country's sixth-largest bank by assets said the new shares in the rights issue would be priced at 0.401 euros ($0.51) each, and existing shareholders would receive rights to buy three new shares for each share they already own. Banco Popular's shares closed Friday at EUR1.12.

Earlier this fall, an evaluation of Spain's banking sector found Popular would have a capital shortfall of EUR3.2 billion under heavy economic duress.

The capital increase is part of an attempt to ward off a capital injection from the rescue fund of up to EUR100 billion that Spain negotiated with the European Union for its financial sector this summer. Banks with capital shortfalls and in need of EU funds must submit recapitalization plans that will be evaluated by Spanish and European authorities.

As part of its rights issue, which could be valued at up to EUR2.5 billion, Banco Popular said it had hired 15 banks to underwrite EUR2.08 billion of the increase. Five banks--Deutsche Bank AG (DB, DBK.XE), Banco Santander SA (SAN, SAN.MC), UBS AG (UBSN.VX, UBS), Bank of America Corp. (>> Bank of America Corp), and J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.)--will be global coordinators.

"We're aware that we're asking for sacrifice from shareholders," said Angel Ron, Popular chairman, during a special general shareholders meeting. "But without a doubt, this is an operation for the future, that assures our independence and profitability" and which will ultimately benefit shareholders that buy into the increase at attractive prices.

Write to Ilan Brat at ilan.brat@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Recommend :
0
React to this article
Latest news
Date Title
1m ago TRIMAC TRANSPORTATION : Notice of Conference Call, First Quarter Financial Results and Annual General Meeting
2m ago Researchers from Michigan State University Detail New Studies and Findings in the Area of Solids Research
3m ago Fitch Upgrades 1 Class of MSDW 2003-HQ2
4m ago ALSTOM : tram design excellence under the spotlight in Paris and Milan
4m ago PPL : Top Environmental Award for Local Electricity Distributor
4m ago SAFRAN : Technofan selected by Embraer to provide Ventilation System Package for the E-JETS E2 Program
4m ago IMF MONETARY FUND : Transcript of a Press Briefing: G-24 Ministers
4m ago QRXPHARMA : Moxduo Post Advisory Committee Meeting Investor Call Details
4m ago MARFRIG GLOBAL FOODS : 04/17/2014 - Minutes of the Ordinary General Meeting
4m ago Reports from Beijing Institute of Technology Advance Knowledge in Astrophysics Research
Latest news
Advertisement
Hot News 
INDEPENDENT BANK : Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Change in Directors or Principal Officers (form 8-K)
HAYNES PUBLISHING : Third Quarter Hit By Us Inventory Returns, Weak UK
SPACEANDPEOPLE : Shares Slide As It Lowers 2014 Forecast
BLUR : Shares In Blur Group Plummet Due To Delayed Revenue Recognition
LDK SOLAR : Provides Additional Information on its Request for Review of NYSE Regulation's Decision to Suspend Trading and Commence Delisting Procedures
Most Read News
9h ago Google, IBM cast shadow
10h ago Nokia sale of unit to Microsoft approved
12h agoDJLLOYDS BANKING : ECN Retail Tender Offer Results
1d ago BANK OF AMERICA : financial crisis costs become a recurring nightmare
1d ago Google misses revenue target, ad prices slide
Most recommended articles
6h ago U.S. shares seen opening lower as tech giants stumble
3h ago Financials bolster FTSE after reassuring U.S. earnings
5h ago BLACKSTONE : earnings rise 30 percent, boosted by private equity gains
04/10DJCarrefour Sales Grow at Fastest Pace in Two Years
4m agoDJStocks Rise For Fourth Straight Day
Dynamic quotes  
ON
| OFF