Standard Chartered embarks on £1.78bn rights issue

by Gill Montia

Story link: Standard Chartered embarks on £1.78bn rights issue

Standard Chartered has announced plans to raise £1.78 billion in a rights issue.

Existing shareholders will be able to buy 30 shares for every 91 shares held at a price of 390 pence a share, representing a 48.7% discount on the company’s closing price on Friday 21st November.

According to the emerging markets bank, the fundraising will strengthen its position in the current economic uncertainty and allow it take advantage of opportunities that may present themselves in the global financial services sector.

The group, which is listed in London and Hong Kong, has reported that existing shareholder, Temasek, will be subscribing in full to the issue of new shares. The Singaporean sovereign wealth fund already holds a 19% stake in the business.

The bulk of Standard Chartered’s profits come from Asian, African and the Middle Eastern markets, which the bank describes as relatively resilient in the current financial turmoil, allowing it to predict a strong performance for the second half of the year.

The rights issue is being underwritten by JP Morgan and Goldman Sachs.