In an attempt to raise 3.7 billion euros in new capital, the French bank Natixis, troubled by the subprime crisis, has announced that it would sell new shares at a 60% discount.
Shares in French investment bank Natixis fell Thursday after it launched a share issue to raise 3.7 billion euros (5.37 billion dollars) to bolster a balance sheet badly hit by the US subprime home loan crisis.
In early trade, Natixis shares were down 2.23 percent in an otherwise flat market but later recovered the lost ground to trade firmer on speculation the company could attract a new large investor.
Natixis is fighting to recover from the effects of the financial crisis sparked by the collapse of the US high-risk or subprime mortgage market which has cost it and its bank peers billions of dollars.
The bank announced early Thursday that the issue of 1.6 billion new shares would be priced at 2.25 euros -- a massive 61 percent discount to the last traded price and more than the 40 to 50 percent expected in the market.
Shareholders approved the cash call on Friday despite vocal opposition from several quarters.
"Natixis is ready to write a new chapter in its history," the president of the bank's board Philippe Dupont told shareholders Friday.
"We have suffered the consequences of this crisis which surprised Natixis in the very first months of its existence" after its founding in 2006, Dupont said.
Last week, Natixis reported a net loss of 948 million euros for the first half of 2008 while revenues fell by almost two thirds to 1.55 billion euros.
Date created : 2008-09-04