B&B shareholders vote in favour of £400m rights issue

by Gill Montia

Story link: B&B shareholders vote in favour of £400m rights issue

Bradford & Bingley (B&B) shareholders have voted in favour of the bank’s proposed rights issue.

The buy-to-let lender has reported that around 223 million shareholders voted for the plan, while seven million voted against and nine million abstained.

Support for the £400 million fundraising came despite the bank’s share price having dropped below the rights issue price of 55p yesterday, at 47p.

B&B has had a torrid few weeks during which it has been forced to revise its plans to recapitalise on two occasions.

It also had its credit rating downgraded by Moody’s, which prompted US private equity firm, Texas Pacific Group, to abandon plans for a £179 million injection of cash into the business.

However, last week, the bank’s four largest shareholder (Standard Life, M&G, Legal & General and Insight Investment) lined up behind the £400 million cash call for fear of the repercussions that could result for the UK financial sector should the lender collapse.

At the same time, High Street banks HSBC, Lloyds TSB, HBOS, Barclays, RBS and Abbey agreed to take up a proportion of any shares left with UBS and Citigroup, which are underwriting the rights issue.

The share sale will begin on 8th August and close on 26th August.