Shareholders in beleaguered lender Bradford & Bingley snapped up just 27.84% of its £400m rights issue, leaving underwriters with more than £288m of unsubscribed stock.
Lead underwriters Citigroup and UBS, supported by four institutional B&B shareholders and other sub-underwriters, will be forced to take on the remaining 597,263,479 new shares should buyers not be found by Friday.
Bradford & Bingley looked to shareholders to foot the full 55p per share rights issue after US private equity firm TPG dropped plans to inject £179m in the ailing lender last month.
Investors have shunned British banking cash calls in the last few months – with HBOS shareholders agreeing just 8.29% of its £4bn rights issue, while Barclays had a 19% take-up of its £4.5bn fundraising.
Meanwhile, Bradford & Bingley has appointed former Alliance & Leicester boss Richard Pym as its new chief executive with immediate effect.
Pym retired as A&L Group Chief Executive in July 2007 and replaces Steven Crawshaw, who stepped down in June for health reasons.
“Bradford & Bingley has developed strong customer franchises in savings and lending and I am delighted to have been invited to lead the business,” Pym says.IFAonline
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