Monday, February 11, 2008

SocGen launches rights issue at deep discount

(Reuters) - Societe Generale (SOGN.PA: Quote, Profile, Research) launched a 5.5 billion euros ($7.97 billion) capital increase on Monday to plug holes in its balance sheet following a rogue trading scandal.

The one-for-four rights issue at 47.50 euros per share offers a discount of 38.9 percent to Friday's closing price.

"The price is very low. The feedback from the market cannot have been very encouraging. As they can't miss this deal they decided to strike very low," said Landsbanki Kepler banking analyst Pierre Flabbee.

Fund managers contacted by Reuters last week had been looking for a discount of up to 30 percent.

The bank's shares fell 3 percent to 75.40 euros by 1156 GMT with France's benchmark CAC 40 index .FCHI down 0.5 percent.

SocGen revealed plans to tap investors on January 24 when it stunned the financial world with 4.9 billion euros of rogue trading losses blamed on a single trader.
 

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