Standard Chartered PLC, the British bank that focuses on emerging markets today announced plans for a fully underwritten £3.3 billion ($5.2 billion) rights issue to boost its capital in order to meet the new global capital rules.
The London-based bank plans to offer one share for every eight shares held at a price of £12.80 each, or $156.82 Hong Kong dollars a share for Hong Kong shareholders, a 33 per cent discount to yesterday closing price in London and a 32 per cent discount to yesterday closing price in Hong Kong.
The Rights Issue is fully underwritten by J.P. Morgan Cazenove, Goldman Sachs
International and UBS Investment Bank.
The directors of the bank intend to take up their entitlements in full and Temasek, the sovereign wealth fund of Singapore and the bank's largest shareholder holding 19 per cent stake, intends to take up its rights in full to avoid dilution of its shareholding.
However, Temasek is also said to be keen on avoiding breach of the 20-per cent threshold, which could happen if other shareholders in StanChart do not take up their rights in full.