StanChart to raise 1.8 bn pound via rights issue

The UK-based financial services firm Standard Chartered today said it will raise 1.8 billion pound through a rights issue to tackle the economic downturn.

The company today announced a 1,779 million pound rights issue wherein shareholders are entitled to receive 30 equity shares for every 91 held, a company statement said.

"Standard Chartered continues to deliver, despite the challenges arising from the global financial crisis. Our balance sheet remains a source of strength for the group and the proceeds from the rights issue announced today will further strengthen our competitive position as significant opportunities emerge in our markets," Standard Chartered Chief Executive Peter Sands said.

The issue price of 390 pence per share represents a discount of 48.7 per cent to the closing price on November 21, the statement added.

Temasek, Standard Chartered's largest shareholder, is intending to take up its rights and is also participating in the underwriting of the issue. Besides, the directors of Standard Chartered intend to take up their entitlements in full, the statement added.

"The rights issue reinforces the strength of the balance sheet during this turbulent period and will give Standard Chartered the flexibility to take advantage of the opportunities emerging from the current environment," the company added.

JPMorgan Cazenove is acting as a sponsor and joint bookrunner, while JP Morgan Securities is acting as joint underwriter, UBS and Goldman Sachs International are acting as joint underwriters and bookrunners.