Shares in Bradford & Bingley had to be suspended this morning after plunging 16% on news US private equity firm TPG Capital will take a 23% stake in the company.
The TPG deal will raise approximately £179m for the beleaguered lender, which will also tap up investors with a £258m rights issue.
All shares will be issued at 55p offer price, raising roughly £400m for the firm after expenses. B&B had originally announced a £300m cash call at 82p.
Meanwhile, Steven Crawshaw has stepped down as group chief executive with immediate effect as a result of serious illness.
Chairman Rod Kent has become executive chairman and has relinquished his position at the Close Brothers Group to concentrate on his B&B responsibilities.
“The last few weeks have been challenging for Bradford & Bingley, and this is a disappointing trading update reflecting a more difficult market environment,” Kent says.
“I understand shareholders' disappointment.”
B&B shares are currently 16.15% lower to 74p.IFAonline
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