For some time now we have marvelled at the willingness of institutions to back fund raisings from even the most desperate of companies. So we should probably not be surprised that someone – in this instance UBS – has decided to launch a cash call without any explanation as to why it needs the money or what it will be used for.
Thursday’s (very late) press release.
Zurich / Basel, June 25, 2009,
CHF 3.8 billion placement of new shares from authorized capital UBS is offering 293,258,050 newly issued shares from authorized capital to a small number of institutional investors at a price of CHF 13.00 per share. After deducting costs associated with the placement, the amount of new equity capital expected to be raised is approximately CHF 3.8 billion.
Yep, that really is it.
Of course, we could guess what the money is needed for, but pressed on the issue by Reuters, a UBS spokesman denied the raising was related to any “specific event”, putting it down instead to simple “market opportunity”.
But the fact that the Swiss Central Bank, which incidentally wants the power to break up UBS and Credit Suisse if they become too much of a risk for Switzerland, has welcomed the capital proposal, for us, says it all.
Anyway, the market is not too impressed: shares in UBS are down 2 per cent in early trading.
Related link:
UBS unveils SFr3.8bn equity placement – FT Alphaville