Bank of Queensland shares went into a trading halt yesterday to allow the Brisbane – based finance group to raise $275 million in fresh capital from shareholders.
The bank is looking to raise the new equity to meet the regulator’s (APRA) capital requirements and help fund its “strategic priorities.”
The bank will raise $250 million through an institutional share placement and $25 million through a share purchase plan with retail holders.
BOQ said it expected to raise the equity at a 10% to 11% discount to its closing share price on Friday of $8.64. The final price should be known today.
Westpac raised $2 billion earlier this month from big shareholders and has a $500 million retail offer out to shareholders at the moment which is due to close next Monday.
The capital will give the bank a buffer over the Australian Prudential Regulation Authority’s minimum capital requirement, under which banks must have balance sheets that are “unquestionably strong.”
It comes a month after the bank last month posted a weak profit result and warned of a soft outlook for 2019-20, the first result released by new CEO George Frazis.
The retail offer will be sent to shareholders around December 3 and remain open to December 20.
Retail shareholders will be allowed to apply for up to a maximum of $30,000 of new shares.
BOQ says it “may scale back applications should it receive demand above the target of approximately $25 million or issue a higher amount above that target, at its absolute discretion (and, if a higher amount is issued, either accept applications in full or scale back applications at its absolute discretion).”
The retail offer price will be either the lower of the placement price or the weighted average price of the shares in the five days up to and including December 20 (which is expected to be the closing date), less a 2% discount.
