SCMP.com
22 May 2008
Swiss bank UBS launched a deeply discounted rights issue worth 16 billion Swiss francs (HK$121 billion) on Thursday at a third below its latest market price in a bid to lure investors to repair its battered balance sheet.
The emergency offering, at 21 francs per share - a whopping 73 per cent below its peak price less than one year ago - illustrates the extent of UBS’s troubles after the world’s largest wealth manager was forced to write down around US$37 billion of assets hit by the United States subprime mortgage crisis.
The price comes far below what some analysts had expected in recent weeks, when speculation had centred around 24-25 francs per share, but above the 17-20 franc price feared by some, which would have meant a massive dilution for existing shareholders.
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