If you want to know how cash-strapped Lonmin is, go to the website of the world’s third largest platinum producer and try to download the freshly-pixelated prospectus for the company’s latest rescue rights.
Actually, don’t! The site’s clunky as hell and will probably crash. We’ll do our bit here and donate some bandwidth. The full prospectus — all 576 pages — is available after the jump. Read more
Modern science keeps people alive longer, but it’s not always certain that extended human animation is necessarily a good thing.
A similar force seems to be at play in the corporate world — and it too comes with a fancy price tag. Read more
Is it because Deutsche Bank’s staff really didn’t want to offend any future employers? Selling a €6.3bn rights issue is not easy, but a group of 25 underwriters does suggest a certain lack of discernment.
Although that is fewer than four years ago, when Deutsche hired 32 of the 35 banks interested. (Who were the lonely three, we wonder?) According to the International Financing Review, those that did not deliver have missed out this time in the industry game of reciprocity. Read more
You’ve got to admire the audacity of Credit Suisse, Deutsche Bank, BofA Merrill Lynch and Citi: they’ve agreed to underwrite the £5.8bn Barclays rights issue, pitched at 185p on a 1-for-4 basis. Read more
“We are very comfortable with our balance sheet position, in terms of our equity position as well as our debt position,” Sunny Verghese told Reuters in an interview on Thursday… Asked when Olam was likely to tap the markets at the earliest, Verghese said: “Definitely not in the next five to six months.”
Since that interview we might assume Olam has become less comfortable with its balance sheet position because on Monday the company announced an intriguing $750m rights issue.
Spain’s Popular bank has got backing for a €2.5bn rights issue. But here’s the thing we think deserves a touch more attention — in the run up to the rights issue, Popular once again ramped up its holdings of its own shares, from 0.588 per cent in July to 3.979 per cent on the second of November (data here). We still find this odd…
We will claim a direct hit on this one.
Sequana, the French paper manufacturer that takes in Arjowiggins, has announced a rescue rights issue aimed at raising €150m — equivalent to its existing market cap. Read more
We were having problems confirming this at pixel time (all enquiries were directed to a fax machine) , but it seems a shame not to share it given the ‘usually knowledgeable’ status of the source… Read more
Choose your story.
From the WSJ just after 4pm London time: Read more
Banco Sabadell, the Spanish lender, has begun sounding out investors about a rights issue worth up to €1.2bn and has met investors in London ahead of finalising the rights issue launch, reports the FT, citing people familiar with those talks said. The move is part of a cascade of recapitalisations and mergers predicted across the Spanish banking sector following strict new government regulations. Sabadell, which last year bought Cam , a nationalised saving bank riddled with bad property assets, is preparing to launch the €1bn-€1.2bn share sale after first seeking the permission of its investors later this month. The bank holds an extraordinary general meeting on February 23. Spain’s conservative government last week announced new measures to force banks to set aside an extra €50bn in provisions for real estate assets by the end of this year. But it granted an extra year to banks that merged with rivals as part of a drive to consolidate one of the most saturated retail lending markets in Europe.
From p.63 of the English version of the UniCredit rights prospectus, which can be found here (H/T Gianluca Codagnone).
* H/T @mark_dow
Here’s the Unicredit rights issue prospectus. We’re busy chasing down the story that this includes a euro break-up as a risk factor, warranted though that is. Read more
This is a reader appeal — just why are there so many banks working on Unicredit’s new rights issue? We still can’t work it out:
In addition, the Company informs that, following today’s Board of Directors meeting, the underwriting agreement related to the transaction was signed. The underwriting syndicate will be coordinated and led by BofA Merrill Lynch, Mediobanca and UniCredit Corporate & Investment Banking who will be acting as Joint Global Coordinators and Joint Bookrunners and will include, in addition to BofA Merrill Lynch and Mediobanca, Banca IMI, BNP PARIBAS, Credit Suisse, Deutsche Bank, HSBC, J.P. Morgan, Société Générale and UBS who will be acting as Joint Bookrunners; ING, Nomura, RBC, RBS and Santander who will be acting as Co-Bookrunners; BBVA, Credit Agricole CIB, Mizuho International plc and MPS Capital Services who will be acting as Co-Lead Managers and BANCA AKROS S.p.A., Banca Aletti & C. S.p.A., Banca Carige S.p.A., Equita SIM S.p.A., Intermonte, Investec Bank plc and Keefe, Bruyette & Woods, Ltd who will be acting as Co-Managers. The underwriting syndicate members have committed, severally and not jointly, to subscribe any new ordinary shares that should remain unsubscribed at the end of the Offering and of the following offer on the MTA of the unexercised subscription rights pursuant to Article 2441, paragraph 3, of the Italian Civil Code, up to a total amount of Euro 7.5 billion. The underwriting agreement contains, inter alia, usual clauses which condition the effectiveness of the underwriting commitments or which grant underwriters the right to terminate the agreement, in line with international best practice…
Italy’s Unicredit said it plans to sell new shares for 43 per cent less than Tuesday’s closing price, excluding the value of rights, in a €7.5 bn-euro offer to strengthen its capital position, Bloomberg reports. UniCredit will sell the shares at 1.943 euros each, offering two for every one held. UniCredit shares were suspended after falling the most in two months in Milan trading. The stock has declined 26 per cent since the lender announced the offering on November 14. The Wall Street Journal says Uncredit has launched the rights offer because it needs to meet tough new European capital requirements and that the terms signal how expensive it could be for other lenders to follow suit in current market conditions. Collectively Italian banks have to raise around €14bn in fresh capital to meet regulatory requirements, according to the WSJ. Unicredit’s steep discount weighed on the shares of other Italian banks Wednesday morning. Banca Monte dei Paschi di Siena shares were down 2.4 per cent, while the shares of Intesa Sanpaolo, which raised €5bn in new equity last year fell by 3.5 per cent.
There’s a distinct whiff of burnt fingers in the City of London on Thursday morning.
The share price of punter’s favourite Pursuit Dynamics has crashed and burned after the fluid technology specialist announced a big revenue shortfall, a £10m rights issue and the resignation of its colourful chief executive Roel Pieper. Read more
… because Unicredit is passing round the begging bowl.
It’s asking shareholders to back a €7.5bn cash call and trying to make it all look a bit better by pulling the old reverse stock split trick. Read more
UniCredit has given its clearest signal yet that it will seek to raise its capital buffers as market turmoil continues to hit European bank shares, the FT reports. In his first big interview since becoming chief a year ago, Federico Ghizzoni told the Financial Times that details of his “industrial plan” – a blueprint for the bank’s future strategic direction as well as its forecast capital and liquidity needs – were still a work in progress. But he said the bank could increase core capital through “a rights issue, risk weighted asset reduction and asset sales”. He added: “I think the market is ready [to support these] if you propose a credible plan.” A meeting last Friday with the powerful local banking foundations that control 13 per cent of the bank’s shares considered the plan but made no final decision. Mr Ghizzoni said he would hold off announcing his plans to strengthen capital for at least another two months.
Is this the most complicated cash call of recent times ever?
Judge for yourself. Read more
Italy’s UBI Banca has announced an unexpected €1bn capital increase to bring it in line with new Basel III rules, raising market expectations that other Italian banks, which are among the most weakly capitalised in Europe, will follow, reports the FT. Shares in Italian banks fell across the board on expectations UBI Banca’s rights issue, which raises its top notch core capital to 8%, would galvanise the rest of the sector with a consequent dilution of earnings per share. Analysts expect Monte dei Paschi di Siena, Italy’s third-largest bank by assets, and Banca Popolare di Milano, a regional lender, to be among those most likely to boost core capital in coming weeks. Lex says that such moves by other Italian banks would be timely and needed.
Luxury car maker Porsche has unveiled a €5bn ($7bn) share sale to reduce its debt as part of a planned merger with Volkswagen that is already facing regulatory delays, Bloomberg reports. The company announced the new shares in the capital increase at a 32 per cent to Friday’s closing price in order to lure investors, the FT reports. Porsche has shareholder approval to sell many more shares at an even steeper discount if investors are not willing to buy at the current price. The issue will be watched closely in a market for listings that has been rocked by volatility arising from the Japan earthquake and war and revolution in the Middle East.
As we have discovered in recent weeks there’s a greater chance of getting blood from a stone than a UK-listed company voluntarily confessing to M&A activity.
So it’s to Serco’s credit that it has has attempted to set the record straight following reports which claimed the outsourcing firm had made a $2bn offer for SRA International, a US security, defence and health services company. Read more
Piraeus, Greece’s fourth biggest bank, unveiled the terms of a rights issue on Monday, demonstrating that Athens’ troubled lenders can tap the markets despite the country’s economic and financial woes, reports the FT. The bank said it would launch a rights issue to raise €807m ($1.1bn) in cash to boost its capital adequacy ratios and explore organic growth opportunities in neighbouring countries. Some bankers however said the issue is a precautionary move to deal with losses related to Greece’s sovereign debt crisis. The subscription price was set at €1 per share and the subscription ratio at 12 new ordinary registered shares for every five existing ones.
BBVA, Spain’s second-biggest listed bank, has launched a €5bn ($7bn) rights issue following a deal to buy joint control of Turkey’s Garanti Bank, the FT reports. The rights issue is the third by a big European bank since regulators’ Basel III agreement in September to toughten bank capital requirements. China Construction Bank also on Tuesday announced a $9.2bn rights issue to strengthen its capital ratios. BBVA said that it was buying 24.9% of Garanti for €4.2bn and would jointly manage the bank with Turkey’s Dogus group, a conglomerate. The Source notes that the numbers look good for BBVA, in a deal that ‘kills two birds with one stone’.
How much money does one bank need, asks FT Alphaville. Out on Wednesday — a £3.25bn rights issue from Standard Chartered. It’s rather a surprise because StanChart undertook a £1bn share issue, also for capital-raising purposes, just 14 months ago — back in August 2009. And the international emerging markets bank has been über-keen to trumpet its “strong capital position.” Under the current Basel II regulatory framework, StanChart posted a core Tier 1 capital ratio of 9 per cent at the end of June. The bank was one of the few not to receive government funds or central bank liquidity in the recent financial crisis. It is, by all accounts, one of the strongest banks out there. Read more
Standard Chartered on Wednesday announced plans for a fully underwritten £3.3bn ($5.2bn) rights issue in an effort to buttress itself from the impact of new global capital rules, the FT reports. Temasek, the Singapore state investment agency that owns just over 19 per cent of StanChart, is understood to be planning to take up its rights in full in order to avoid a dilution of its shareholding. However, the agency is also thought to be keen to avoid breaching the 20 per cent threshold, which could happen if other shareholders in StanChart failed to take up their rights in full.
If you’re wondering who might follow the lead of Deutsche Bank and tap its shareholders for cash this table should help.
Source Merrill Lynch: Read more
Deutsche Bank is set to launch a rights issue of €8bn-€9bn ($10.2-$11.4bn), in a push to boost capital ratios ahead of a likely increase in banks’ capital requirements, reports the FT. The bank, which is also expected to use some of the funds to increase its 29.9% stake in Germany’s Postbank, aims to announce the offering on Monday or Tuesday. The move comes as global regulators prepare to meet in Switzerland this weekend to approve new Basel capital and liquidity measures. Up to 10 investment banks are believed to have been approached to pitch for the Deutsche deal.
Resolution has clinched its £2.75bn deal to buy most of Axa’s UK life assurance operations in a deal that takes the group another step along its path to create a £10bn life and pensions company, the FT reports. Resolution said on Thursday that its shareholders had unusually pre-committed to take up 52 per cent of the £2bn rights issue being used to fund the deal before the final terms of the takeover were announced.
Bank of Ireland has met its target of raising €3.4bn ($4.1bn) of fresh capital, more than demanded by its financial regulator, after a strong reception for its deeply discounted rights issue, reports the FT. The bank said that investors had bought 95% of the new shares offered in its €1.7bn rights issue, paying 55 cents per share for the three-for-two rights issue – a 30% discount to Wednesday’s closing share price of 78 cents. The rump, or remaining shares, were sold at 75 cents per share.
…should be based on consideration of the prospectus as a whole by the investor.
They’re joking, right? Read more