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HSBC Holdings Plc Announces Rights Issue
The Rights Issue will result in the issue of 5,060,239,065 New Ordinary Shares at 254 pence per share, on the basis of:
5 New Ordinary Shares for every 12 Existing Ordinary Shares held on the Record Date.
The Rights Issue is fully underwritten by Goldman Sachs International, J.P. Morgan and others.
HSBC has also today published its results for the financial year ended 31 December 2008. The results announcement and the Annual Report and Accounts for the financial year ended 31 December 2008 can be viewed at www.hsbc.com/investor-relations.
The Rights Issue is conditional upon, amongst other things, Shareholders' approval of an increase in the Company's authorised share capital to create sufficient Ordinary Shares for the Rights Issue and the Shareholders granting authority to the Directors to allot and issue the New Ordinary Shares at the General Meeting.
The Board considers that the Rights Issue and the Resolutions are in the best interests of the Company and its Shareholders as a whole and accordingly the Board unanimously recommends to Shareholders that they vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares.
Background to and reasons for the Rights Issue
HSBC has long maintained a culture of responsibility and conservative risk management which have combined to produce a strong financial position which has enabled it to create valued long-term relationships with customers. These fundamental beliefs are deeply rooted in the Company's character. The key elements of financial strength are a strong capital base coupled with sustainable and stable funding sources, and in particular a strong and growing deposit base. Those strengths have served HSBC well over the years. Today HSBC is well capitalised, liquid and profitable. The Company's capital strength is supported by a conservative balance sheet characterised by an advances to deposits ratio of 83.6 per cent as at 31 December 2008 and a core funding base that continues to grow.