Standard Chartered Plc raised about $5.1 billion after 96.8 percent of the bank’s shareholders exercised their rights in a share sale on Friday, signaling confidence in Chief Executive Officer Bill Winters’s strategy to turn around the Asia-focused lender.
The shares will be listed in Hong Kong and the first trading day is expected to be Dec. 16, the London-based bank said in a statement on Friday.
Winters, 54, announced the rights issue in November as part of a plan to restore profitability at a bank reeling from losses tied to bad loans after commodity prices slumped and economies from China to India cooled. The CEO is also cutting 15,000 jobs to help save $2.9 billion by 2018, scrapped a second-half dividend and unveiled plans to restructure or exit $100 billion of risky assets.
The 705 million new shares include those bought by Temasek Holdings Pte, Standard Chartered’s largest shareholder, according to the statement. The Singaporean state-owned investment firm intended to take up rights for 15.8 percent of the company’s existing share capital, the bank said last month.
Of Temasek’s 17.2 percent stake in Standard Chartered, 1.4 percentage points has been loaned out, according to the British lender’s November filing on its capital raising, reducing Temasek’s entitlement in the rights issue to 15.8 percent.
The shares were loaned under the terms of a total return swap agreed in 2013 with Bank of America Corp., and which expires at the end of this year, according to a person familiar with the situation.
Stock Decline
A Temasek spokesman declined to comment. Mark Tsang, a Bank of America spokesman in Hong Kong, declined to comment.
Standard Chartered’s stock in Hong Kong sank 0.7 percent as of 1:36 p.m. Friday. The lender’s London-listed shares fell 1.3 percent on Thursday, taking their drop this year to about 44 percent.
The bank previously raised capital in 2008 and 2010 to help fund its expansion under former CEO Peter Sands. This year’s rights issue was fully underwritten by JPMorgan Chase & Co. and Bank of America Corp.
Bloomberg