RBS announces $24 bn rights issue


RBS announces $24 bn rights issue

Reuters

London: Royal Bank of Scotland (RBS) has announced a record 12 billion pound ($24 billion) rights issue to cover a potential 5.9 billion pound writedown on the value of toxic assets and help rebuild a stretched balance sheet.

RBS said it expects disposals to generate 4 billion pounds in core capital by the end of this year and could sell all or part of its insurance business.

RBS will offer 11 new shares for every 18 existing shares at 200 pence per share in the rights issue, Europe’s biggest ever, representing a 46% discount to the last closing price.

The bank estimates the effect of writedowns on core capital will be 4.3 billion pounds net of tax, or 5.9 billion pounds before tax.

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