Bladewatch.com

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3352795.ece

Société Générale has sought to guarantee the success of its €5.5 billion (£4.1 billion) rights issue by pricing the new shares at a hefty 39 per cent discount to the current price.

The French bank is raising cash to plug the hole in its finances left by the biggest rogue trader scandal in history. In a move that suggested that it had little confidence in its ability to attract investors on normal terms, it said that it would issue 116.6million new shares priced at €47.5, compared with a closing price of €77.72 on Friday. The offer took the market by surprise, driving SocGen’s shares down 4 per cent to close at €74.59 in Paris.

Analysts had expected a discount of 20 to 30 per cent. Many said that Daniel Bouton, the bank’s embattled chairman, risked upsetting SocGen’s existing investors, whose stakes will be diluted by the issue of one new share for every four existing shares.

The analysis of events past and present at Societe Generale continue. In the meantime, it’s announcing a new rights issue, and has some updates regarding the issues resulting from the reported losses.

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