Provident Financial share price yo-yos after investors rubber-stamp £300m rights issue

Provident Financial shares appeared to lurch widely today after the doorstep lender’s rights issue was yesterday rubber-stamped by investors.

The firm revealed plans for a £300m rights issue at the end of last month.

Yesterday the Bradford-based lender called an extraordinary general meeting (EGM) to vote on the fundraising. It was supported by 99.93 per cent of those in attendance.

Shares first appeared to plunge over 25 per cent and are now up 40 per cent. This, however, was a product of what City insiders called a “technicality” of a rights issue going live. The firm’s overall stock market valuation is largely unaffected.

Provident investors were buoyed in February by the fact the rights issue was considerably lower £500m widely reported.

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In addition, the results of two regulatory probes were announced with fines and redress considerably lower than some analysts have predicted.

Provident warned investors at yesterday’s EGM they could expect a “correction” to the share price today.

Nil-paid rights shares allow investors to trade their option to participate in a rights issue.

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