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SocGen to Raise $8B With Discount Shares

Posted Feb 11, 08 8:04 AM CST in Business 

(Newser) – Societe Generale, the French bank hit with a $7 billion loss in a massive trading fraud, will replenish its cash reserves through an $8 billion stock offering at a heavily discounted rate, the company said today. Shares will be priced at €45.50, or 39% off the Feb. 8 closing price, lower than the 30% discount analysts predicted. Existing shareholders can buy one share for every four they own, Bloomberg reports.

SocGen also raised its 2007 profit prediction from last month's forecast, despite reporting an additional €600 million in writedowns, for a total of €2.6 billion. The No. 2 French bank is seen as a takeover target, but the credit crunch may work in its favor. "The lack of liquidity in the market may help Societe Generale stay independent,'' a French analyst tells Bloomberg. "With the rights issue, it certainly has the means to stay independent.''

Source Bloomberg

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Societe Generale bank employees stand outside the bank headquarters in a show of support for Chief Executive Daniel Bouton, Wednesday Jan. 30, 2008 in La Defense, outside Paris. Societe Generale offered...   (Associated Press)
In this pool photo made available Wednesday, Feb. 6, 2008, French trader Jerome Kerviel is seen at his lawyer Elisabeth Meyer's office in Paris, Tuesday, Feb. 5, 2008. Potential legal troubles for French...   (Associated Press)
Societe Generale bank employees stand outside the bank headquarters in a show of support for Chief Executive Daniel Bouton, Wednesday Jan. 30, 2008 in La Defense, outside Paris. (AP Photo/Thibault Camus)   (Associated Press)
Societe Generale bank employees stand outside the bank headquarters in a show of support for Chief Executive Daniel Bouton, Wednesday Jan. 30, 2008 in La Defense, outside Paris. (AP Photo/Thibault Camus)   (Associated Press)
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