Rights issue
28/04/2008
HBOS could be set to announce a multi-million rights issue to shore up its balance sheet, it has been reported.
The lender is believed to be debating plans to ask its existing investors for between £2 billion and £4 billion ahead of its annual general meeting in Glasgow tomorrow.
HBOS chief executive Andy Hornby is expected to announce write-downs of around £3 billion at the meeting resulting from the bank's exposure to the US sub-prime mortgage crash, the Sunday Times reports.
Should the rights issue go ahead it would make HBOS the second UK lender to ask shareholders for funding after Royal Bank of Scotland issued a cash call for £12 billion early last week.
Earlier this year, shares in HBOS fell as far as 17 per cent in trading after rumours surfaced that it was facing a funding emergency.
Since the start of the year shares in HBOS have slumped by 27 per cent.
