In Wake of Scandal, Societe Generale to Sell Stock, Raise Money
Societe Generale SA, France's second-biggest bank, plans to raise 5.5 billion euros ($8 billion) by selling stock at a lower price than analysts estimated to replenish capital after the worst trading loss in banking history.
The French bank will sell shares in a rights offer at 47.50 euros each, or 39 percent less than the Feb. 8 closing price, according to a statement today. Analysts had expected a discount of as much as 30 percent. Existing shareholders can buy one share for every four held.
Societe Generale fell as much as 6.3 percent in Paris trading to 72.83 euros. The offer comes less than three weeks after the bank said bets by Jerome Kerviel had led to a 4.9 billion-euro trading loss. Societe Generale said today that net income last year fell to 947 million euros from 5.2 billion euros in 2006.
Published on February 11, 2008
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