In what is being considered as the UK’s major rights offering, Lloyds Banking Group intends to raise GBP21 billion to reduce the government majority control, reported Bloomberg.
The bank is expected to raise GBP13.5 billion in share sale, and GBP7.5 billion in exchange offers, reported the source quoting a statement by the bank. The lender will not take part in the government’s asset protection scheme, which would have raised the UK government’s stake to approximately 62% and cost the bank GBP15.6 billion in fees.
Earlier, it has been reported that the bank, 43% owned by the UK, is in talks with underwriters at UBS and Bank of America Merrill Lynch, to combine a rights issue of approximately GBP15 billion with the conversion of up to GBP10 billion of existing debt into instruments convertible into equity.
Win Bischoff, chairman of Lloyds, said: “These proposals provide a significantly more attractive, market-based alternative to participating in the APS. The plan will offer superior economic value to shareholders.”
