Westpac raises $2.5 billion in capital, share placement
Westpac has raised capital to the tune of $2.5 billion through the placement of new ordinary shares.
The bank said in a statement to the Australian Securities Exchange that it had a “significantly oversubscribed” book build and was forced to scale back investor bids after receiving strong support.
The placement shares, numbering 156,250,000 at $16.00 per share, are set to be issued and commence trading on December 16, 2008, with settlement scheduled for December 15. The bank said the shares would not be entitled to the final dividend for the year ending September 30, 2008.
Westpac has reiterated its intention to allow eligible shareholders to take part in a non-underwritten share purchase plan, which would provide shareholders with the opportunity to purchase up to $10,000 worth of Westpac ordinary shares.
Westpac said the decision to undertake the capital raising was in part influenced by the impact of the slowing economy and possible further deterioration in credit and operating conditions. The bank has also said with hybrid equity markets becoming increasingly challenging, its “ability to raise capital through this mechanism, including the replacement of St George Bank hybrids, is uncertain”.
Westpac will be facing increased pressure on its balance sheet in light of tough market conditions.
AUTHOR
Amal Awad
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