Standard Chartered Raises $5.1 Billion in Investor Share Sale

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  • Bank's new shares are scheduled to begin trading on Dec. 16
  • CEO Bill Winters announced capital increase in November

Standard Chartered Plc raised about $5.1 billion as investors acquired shares in its rights offering, buying time for Chief Executive Officer Bill Winters to turn around the Asia-focused lender.

The new shares are scheduled to trade in Hong Kong on Dec. 16, the London-based bank said in a statement on Friday. About 96.8 percent of investors took up their rights in the sale of shares at 465 pence each, with the remainder sold at 505 pence apiece.

Winters, 54, announced the rights offering in November as part of a plan to restore profitability at a bank reeling from losses tied to bad loans after commodity prices slumped and economies from China to India cooled. The CEO is also cutting 15,000 jobs to help save $2.9 billion by 2018, scrapped a second-half dividend and unveiled plans to restructure or exit $100 billion of risky assets.

Standard Chartered was down 0.7 percent at 505.8 pence at 11:27 a.m. in London, following a 10 day losing streak and a 45 percent decline this year. The stock in Hong Kong sank 1.1 percent on Friday.

Investors include Temasek Holdings Pte, Standard Chartered’s largest shareholder, according to the statement. The Singaporean state-owned investment firm said last month it would exercise rights for the full 15.8 percent of the share capital, it was entitled to. While Temasek has a 17.2 percent holding in Standard Chartered, it had loaned out a 1.4 percent stake, according to Standard Chartered’s November filing.

The shares were loaned under the terms of a total return swap agreed in 2013 with Bank of America Corp., and which expires at the end of this year, according to a person familiar with the situation.

A Temasek spokesman declined to comment. Mark Tsang, a Bank of America spokesman in Hong Kong, declined to comment.

Standard Chartered’s Deputy CEO Mike Rees bought about 357,000 pounds ($540,783) of shares in the offering, the most among the executives, followed by Winters with 304,000 pounds of stock, according to a separate statement.

The bank previously raised capital in 2008 and 2010 to help fund its expansion under former CEO Peter Sands. This year’s rights issue was fully underwritten by JPMorgan Chase & Co. and Bank of America.