Bradford & Bingley rights issue falls short

Written by Editorial Team

18 August 2008 / by Rebecca Sargent

The long-awaited and much speculated over Bradford & Bingley rights issue has failed to raise the £ 400 million needed to shore up its balance sheet.

The buy-to-let mortgage specialist shifted just 27.84 per cent of the new shares on offer at 55p, just higher than today’s share value. As a result, underwriters have been left with as much as £300million in shares to pick up.

In fact, underwriters Citi and UBS are expected to attempt to place the shares between themselves and their sub-underwriters, HSBC, Lloyds TSB, HBOS, Barclays, Abbey and Royal Bank of Scotland, by Friday.

Despite three-quarters of the rights issue being left high and dry, Bradford & Bingley’s attempt at raising cash was actually more successful than the attempt by HBOS to raise £ 4 billion, which saw shareholders take up just eight per cent as share prices drop below the rights issue price.

The news comes as Bradford & Bingley announces the arrival of a new chief executive, Richard Pym. The news is hoped to boost consumer confidence in the buy to let mortgage specialist. Commenting on his new post, Richard Pym said:

“Bradford & Bingley has developed strong customer franchises in savings and lending and I am delighted to have been invited to lead the business. I look forward to working with the Board and executive team in building a successful future.”

Bradford & Bingley is due to announce its long-awaited six month results to June 30 on August 29.

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