Home > banking, business, economy, europe, united states > HSBC unveils record £12.5bn rights issue

HSBC unveils record £12.5bn rights issue

HSBC on Monday launched the largest traditional rights issue in UK corporate history to raise more than £12.5bn as it outlined plans to close its struggling US consumer lending business.

The new shares are to be offered to existing shareholders on five-for-12 basis priced at 254p, a discount of nearly 50 per cent compared with Friday’s closing price of 491¼p.

The shares, which had been suspended in Hong Kong ahead of the announcement, fell nearly 11 per cent in morning trading to 440¾p in London trading.

The news came as HSBC confirmed it was closing its US consumer finance business and shutting nearly 800 branches. It will take a $265m restructuring charge against the closure, but this would lead to $700m of annual savings. The move would result in the loss of 6,100 jobs.

Stephen Green, chairman of HSBC, expressed regret for buying the business in 2003 for $14bn.

[ Continue reading original article on FT ]

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