Swiss banking giant UBS has revealed it will make one of Europe's largest ever rights issue calls, asking shareholders for CHF16m (£7.94bn).
Shareholders will be entitled to seven new UBS shares for every 20 already held. The shares will be priced at CHF21, a discount of over 30% on last night’s close at CHF30.64.
The right issue comes just a day after UBS completed the sale of $15bn in US real estate related assets to BlackRock.
The Zurich-based firm has been the second hardest hit global bank during the sub-prime crisis, writing down about $37bn in bad debt.
“The rights issue was fully underwritten by a syndicate of banks on 1 April 2008 and the related capital increase was authorized by the shareholders of UBS AG on 23 April 2008,” the UBS statement reads.
“The board of directors has set the subscription price for the new shares at CHF21 per new share, which is expected to translate into gross proceeds of approximately CHF15.97bn.”IFAonline
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