HBoS shareholders approve £4 billion rights issue

SHAREHOLDERS meeting in Edinburgh have approved plans for a £4 billion rights issue to help shore up the finances of HBoS, early reports have suggested.

It was reported that an estimated 98 per cent of investors voted in favour of the rights offering at a shareholders general meeting held at the Edinburgh International Conference Centre this afternoon.

Shareholders will now be given the chance to buy shares priced at 275 pence each, a 6.2 per cent discount on the current price.

Chairman Dennis Stevenson told investors at the meeting that "the UK economy could be in for a far bumpier year or two than foreseen."

The banking giant suffered writedowns of almost £4 billion in the wake of the credit crunch.

The shares issue follows the success of an offer by the Royal Bank of Scotland Group, which saw it raise £12.3bn in its rights offer last month.