SHARES in Portugal’s biggest listed bank plunged yesterday morning after it announced plans to raise up to €1bn (£826m) to comply with national capital regulations.
Banco Espirito Santo’s (BES) share price closed down 10.5 per cent at just over €1, meaning it has now lost more than half of its value since the start of 2012 and is worth €1.5bn. The new shares have been priced at 39 euro cents each.
The rights issue, which will complete by mid-May, is the second time the bank has tapped up investors for cash since 2008.
BES said that it has already received indications of investor interest in taking up the rights from shareholders owning half of its capital, while the investment banks running the book have agreed to take up another 50 per cent if investors don’t buy them.
The aim is to push its core tier one capital ratio up to 10.75 per cent, whereas it is now 9.2 per cent. Although EU authorities have only demanded that banks bring the ratio over nine per cent, the Bank of Portugal has set a higher minium of ten per cent.