RBS shareholders back record rights issue

May 14, 2008

, LONDON, May 14 – Shareholders at Britain\’s Royal Bank of Scotland voted Wednesday in favour of a record-breaking rights issue totalling 12.0 billion pounds (15 billion euros, 24 billion dollars), the bank said.

RBS had unveiled the country\’s biggest-ever issuing of new shares last month in order to shore up its finances after huge subprime-related writedowns and the mammoth takeover of Dutch giant ABN Amro.

An overwhelming 95.38 percent of shareholders voted in favour of the move, with just 4.62 percent against, RBS announced in a brief statement after a general meeting in Edinburgh.

RBS said in April that it would have to make further asset writedowns of 4.3 billion pounds, or 5.9 billion pounds before tax, arising this year from a credit crisis and global financial turmoil.

Strains from the credit crunch had cost it 2.5 billion pounds last year, RBS had revealed in February — when it had also told shareholders that a rights issue would not be necessary.

A rights issue gives current shareholders the opportunity to buy new shares in a company, often at a big discount, in order to boost capital reserves.

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