SocGen plans to raise e5.5 bn
Societe Generale plans to raise e5.5 billion by selling stock at a lower price than analysts estimated to replenish capital after the worst trading loss in banking history.
By Bloomberg |
PARIS: Societe Generale plans to raise e5.5 billion by selling stock at a lower price than analysts estimated to replenish capital after the worst trading loss in banking history.
Societe Generale, France���s second-biggest bank, will sell shares in a rights offer at e47.50 each, or 39% less than the February 8 closing price, according to a statement on Monday. Analysts had been expecting a discount of as much as 30%. Existing shareholders can buy one share for every four held. Societe Generale fell as much as 6.3% in Paris trading.
The offer comes less than three weeks after Societe Generale said bets by Jerome Kerviel had led to a e4.9 billion trading loss. The bank said on Monday that earnings fell to e947 million last year. Finance minister Christine Lagarde said last week controls ���clearly��� failed at the Paris-based bank.
���This rights issue is a matter of life or death,��� said Pierre Flabbee, an analyst at Kepler Equities in Paris, who has a ���reduce��� rating on the stock. The discount ���doesn���t show great confidence in selling the shares,��� he said.
Societe Generale fell e2.22, or 2.9%, to e75.50 in Paris trading as of 10.45 am.
Societe Generale, France���s second-biggest bank, will sell shares in a rights offer at e47.50 each, or 39% less than the February 8 closing price, according to a statement on Monday. Analysts had been expecting a discount of as much as 30%. Existing shareholders can buy one share for every four held. Societe Generale fell as much as 6.3% in Paris trading.
The offer comes less than three weeks after Societe Generale said bets by Jerome Kerviel had led to a e4.9 billion trading loss. The bank said on Monday that earnings fell to e947 million last year. Finance minister Christine Lagarde said last week controls ���clearly��� failed at the Paris-based bank.
���This rights issue is a matter of life or death,��� said Pierre Flabbee, an analyst at Kepler Equities in Paris, who has a ���reduce��� rating on the stock. The discount ���doesn���t show great confidence in selling the shares,��� he said.
Societe Generale fell e2.22, or 2.9%, to e75.50 in Paris trading as of 10.45 am.
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