Investec in R1.3bn share issue

Johannesburg - Investment bank and asset manager Investec [JSE:INL] will raise up to R1.3bn by issuing new shares as it aims to shore up its capital base.

Investec plc [JSE:INP], which is also listed in London, said on Tuesday it plans to issue up to 22 million new shares, with the price and amount to be determined later.

The issue would represent 4.27% of its existing ordinary shares, the company said in a statement.

Based on Monday's closing price of R59.50, the issue could raise up to R1.3bn for the bank. Based on Monday's closing price of its London-listed stock at 503 pence, the issue could raise £110.7m.

However, the group said it would issue shares in both London and Johannesburg, making it difficult to gauge exactly how much it would raise.

The fundraising would allow the bank to preserve a strong tier 1 capital position, CEO Stephen Koseff said in a statement.

Banks around the world have been pushing to boost their the amount and quality of their capital, as regulators demand more "core tier 1" capital to stave off another financial crisis.

Core tier 1 capital, a measure of a bank's financial strength, is usually defined as common shares and retained earnings.

The share issue will be managed by Bank of America Merrill Lynch.

- Reuters