B&B shares hit new low

Updated 10.06 Tue Jul 08 2008

Keywords: low, shares, Resolution, mortgage lender, Bradford & Bingley

Shares in Bradford & Bingley have hit a fresh low deepening concerns over the mortgage lender's outlook.

In early trading, shares were down 22.6 per cent at 32.5p, just above a record low of 32.25p and well below its planned rights issue price of 55p.

Shares in the mortgage lender were down 22.6 per cent at 32.5p, just above a record low of 32.25p

The bank is currently in its third attempt at raising cash, with the planned rights issue having been beset by problems from the start.

It was first forced to scale back the amount it was asking shareholders for and slash the discount price after a profits warning left the initial deal in tatters.

Its second restructured rights issue fell apart after TPG pulled out on the Moody's downgrade, while it has meanwhile faced shareholder fury over the plans.

Four institutional shareholders teamed up to launch an alternative fundraising bid, led by financier Clive Cowdery's Resolution investment firm.

But Resolution pulled out after B&B refused access to its books, sparking further investor anger and setting the scene for a difficult extraordinary general meeting, which has now been postponed until July 17 in Sheffield.

B&B has been hit hard by the mortgage troubles caused by the credit crunch and the subsequent housing market woes.

It has reported mounting arrears within its buy-to-let borrowing base as many property owners struggle with repayments.

Shares fell across the UK and European banking sector on concerns over economic outlook and tracking steep declines in Asian and US markets.