St George Bank plans to raise about $110 million under a share purchase plan which allows eligible shareholders to purchase $5,000 of additional fully paid ordinary shares in the company.
The bank said proceeds from the SPP will be used to provide balance sheet flexibility and follows an institutional capital raising completed in November.
The purchase price for each share under the SPP will be the lower of 97.5% of the volume weighted average price of shares sold on the ASX between 21 February and 27 February 2008, and $35 per share.
"Specific details of the SPP will be sent to eligible shareholders on or around 7 February 2008," St George said in a statement.
By late afternoon afternoon, shares in SGB fell 81 cents or 2.6% to $29.58.
Balance sheet flexibility can signify few different scenarios. New capital for a bank is a means to fund more lending growth or provide a buffer from bad debts related write-offs, the likes of what is happening in the US now.
