Business NEWS
Societe Generale set to raise 4.8bn euros, in talk with Dexia SA for Credit du Nord acquisition
By Germaine Lombardo for CEOWORLD Magazine Updated:October 6, 2009
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Société Générale (SOGN.PA) (GLE.FR) launched a 4.8 billion-euro ($7.02 billion) rights issue on Tuesday to repay 3.4 billion euros bailout, a week after national rival BNP Paribas (BNPP.PA) tapped investors for 4.3 billion euros.
Societe Generale (OTC:SCGLY) also said on Tuesday it had entered talks with Dexia SA (DEXI.BR) to buy the Belgian-French financial services group’s 20 percent stake in French subsidiary Credit du Nord, aiming to boost its retail banking business.
SocGen (Public, EPA:GLE) took EUR3.4 billion in state aid in two tranches at the peak of the financial crisis.
The bank is offering investors two new shares for every nine they already hold at EUR36 each. It said the offer represents a 26.9% discount to the theoretical ex-rights price based on the shares closing value Monday.
The offer launches Oct. 8 and runs to Oct. 20.
The Societe Generale bank said it will reimburse the government immediately after it receives the funds. After that and the acquisition of the outstanding stake in Credit du Nord, SocGen said the remaining capital from the rights issue will give it a pro forma core Tier 1 ratio of 8% as of the end of June, and a Tier 1 ratio of 9.7% from 9.5% previously.
The bank’s management team, rejigged after the resignation of Michael Bouton, the chairman, this April in the wake of the rogue trading scandal, said that it was “determined to implement its long-term strategy and to improve profitability through targeted acquisitions in international retail banking and private banking”.
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