OCBC firms up financials with $3.3 billion rights issue

After snatching Wing Hang bank.

Oversea-Chinese Banking Corporation Limited (OCBC) recently acquired Wing Hang Bank, and now plans to strengthen capital to fund this recent acquisition.

In a media release, OCBC is proposing to issue up to 440,047,710 right shares in order to raise gross proceeds of approximately $3.37 billion from the rights issue.

The issue price per rights share is $7.65 and represents a discount of 25.0 per cent. to the closing price of $10.20 per share on the SGX-ST on 15 August, being the last trading date immediately prior to announcement.

Here’s more from OCBC:

The Rights Shares will, upon allotment and issue, rank pari passu in all respects with the
then existing Shares for any dividends, rights, allotments or other distributions, the record date for which falls on or after the date of allotment and issue of the Rights Shares. It should be noted that the Company had on 5 August 2014 announced an interim one-tier tax exempt dividend for the financial year ending 31 December 2014 of 18 cents for every Share held.

The Rights Issue will enable the Company to strengthen its balance sheet and enhance
the financial flexibility of the Group, which, following the successful completion of the Group’s takeover offer for Wing Hang Bank, Limited (“WHB”), now includes WHB and its subsidiaries.

The total estimated net proceeds from the Rights Issue is approximately S$3.32 billion (or approximately 98.5 cents for each dollar of the gross proceeds raised) after deducting
estimated expenses of approximately S$50.2 million.

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