13/10/2008 - 15:38

HBOS accepts $22bn govt bailout

13/10/2008 - 15:38

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The sale of BankWest to the Commonwealth Bank of Australia is not expected to be impacted by the bailout of embattled parent company HBOS plc, which has accepted a $22 billion rescue package from the UK government.

HBOS accepts $22bn govt bailout

The sale of BankWest to the Commonwealth Bank of Australia is not expected to be impacted by the bailout of embattled parent company HBOS plc, which has accepted a $22 billion rescue package from the UK government.

HBOS today announced the proposed placing of £8.5 billion ($A22 billion) of ordinary shares with the UK government at 113.6 pence each. Shares will be offered to shareholders and new investors first, with the government underwriting the placement.

In addition, HBOS will place £3 billion of preference shares with the government, callable at par after five years.

The placement will have no effect on the merger with Lloyds TSB, which last month launched a 12.2 billion pound deal.

"As a result of the decision to strengthen further the Group's capital ratios, HBOS has secured with immediate effect, access to the UK Government guarantee for short and medium term debt issuance," HBOS said in a statement.

The placement, if fully subscribed to by the UK government, will see taxpayers own some 40 per cent of the company while Lloyds TSB shareholders will hold some 36 per cent, should no existing shareholders participate in the placement.

HBOS' rescue package is part of a $95 billion bank bailout unveiled today, with Royal Bank of Scotland the other bank to accept.

Barclays was also offered help from the government but turned it down, saying it intended to raise more than STG6.5 billion ($A16.62 billion) only from investors.

 

 


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