Britain’s state-controlled Lloyds Banking Group (LBG) said yesterday that it would issue new shares to pay back public bailout funds.
The rights issue, worth £4 billion (US$6 billion), will be launched tomorrow and is to be underwritten by the state, the troubled bank said in a statement.
The news comes only one day after LBG chairman Victor Blank said he would step down from his post by June next year. Blank was sharply criticized for his role in Lloyds TSB’s takeover of rival lender HBOS, which was saddled with billions in toxic assets that have had to be covered by government money.
The British state owns around 43 percent of LBG, as well as P4 billion of preference shares, and could end up owning as much as 65 percent of the group if other shareholders snub the rights issue.
“Lloyds Banking Group confirms that it has agreed with HM Treasury to launch the previously-announced placing and open offer on 20 May, 2009,” Lloyds said.
“The proceeds from the placing and open offer will be used to redeem the £4 billion of preference shares held by [the government],” it said.
Under the terms of the offer, current shareholders can subscribe for 0.6213 new ordinary shares for every ordinary share they already own based on a price of 38.43 pence for each new year.
This price represents a discount of almost 57 percent to Lloyds’ closing share price on Friday. More details will be given tomorrow while shareholders will vote on the plans early next month.
In trade yesterday morning, LBG shares rallied 5.38 percent to 94 pence as investors welcomed news over the weekend that Blank would step down next year.
The Financial Times reported yesterday that former Citigroup chairman Win Bischoff and ex-Standard Chartered chairman Mervyn Davies were both in the running to replace Blank.
HBOS bank faced potential collapse last year as it struggled to raise funds because of a credit crunch that ravaged the sector.
The British government already owns 70 percent of the troubled Royal Bank of Scotland (RBS). RBS was also savaged by the global credit squeeze, as well as the 2007 takeover of Dutch group ABN Amro at the top of the market.
NO RECIPROCITY: Taipei has called for cross-strait group travel to resume fully, but Beijing is only allowing people from its Fujian Province to travel to Matsu, the MAC said The Mainland Affairs Council (MAC) yesterday criticized an announcement by the Chinese Ministry of Culture and Tourism that it would lift a travel ban to Taiwan only for residents of China’s Fujian Province, saying that the policy does not meet the principles of reciprocity and openness. Chinese Deputy Minister of Culture and Tourism Rao Quan (饒權) yesterday morning told a delegation of Chinese Nationalist Party (KMT) lawmakers in a meeting in Beijing that the ministry would first allow Fujian residents to visit Lienchiang County (Matsu), adding that they would be able to travel to Taiwan proper directly once express ferry
FAST RELEASE: The council lauded the developer for completing model testing in only four days and releasing a commercial version for use by academia and industry The National Science and Technology Council (NSTC) yesterday released the latest artificial intelligence (AI) language model in traditional Chinese embedded with Taiwanese cultural values. The council launched the Trustworthy AI Dialogue Engine (TAIDE) program in April last year to develop and train traditional Chinese-language models based on LLaMA, the open-source AI language model released by Meta. The program aims to tackle the information bias that is often present in international large-scale language models and take Taiwanese culture and values into consideration, it said. Llama 3-TAIDE-LX-8B-Chat-Alpha1, released yesterday, is the latest large language model in traditional Chinese. It was trained based on Meta’s Llama-3-8B
STUMPED: KMT and TPP lawmakers approved a resolution to suspend the rate hike, which the government said was unavoidable in view of rising global energy costs The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates. Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT. Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures. A government-organized electricity price evaluation board in March
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has