British bank, Lloyds, are planning to sell hugely discounted shares at almost 60 per cent less than their closing price on Monday night. The bank is hoping people will snap up the deal, raising much-needed funds.
Lloyds is the UK’s largest retail bank and this sale of shares represents the world’s biggest cash call to date. If approved by shareholders at a meeting this Thursday, 36.5 billion new shares will go on sale in December for just 37p each. The bank, which is 43 per cent government owned, is hoping to raise 22.5 billion pounds. A deal from the British government was rejected because it would have meant the bank would be over 50 per cent state-owned. Lloyds are keen to avoid where the Royal Bank of Scotland has ended up. After failing to raise the capital from shareholders, the bank turned to the state. As of this month, the government has a stake of over 80 per cent in RBS.