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HQ banks a billion kronor in rights issue

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HQ banks a billion kronor in rights issue
13:56 CEST+02:00
The board of crisis-hit Swedish financial concern HQ has announced a preferential rights issue to shore up the company's finances by up to a billion kronor ($134 million).

The share issue is fully guaranteed by existing shareholders, HQ confirmed in a statement on Friday.

The purpose of the rights issue is to enable the purchase of fund management arm HQ Fonder from HQ major shareholder Öresund and to ensure the financial stability of the firm.

Öresund is also among the shareholders, who in total control 41 percent of HQ's stock, who have signed up for the rights issue. The group of shareholders has furthermore issue guarantees for the remaining 59 percent of shares on offer.

Swedish finance families Hagströmer, Qviberg and Sten Dybeck are among those backing up the firm in its time of need.

The new rights issue will require the approval of an extra general meeting to be held on September 28th. The same meeting will appoint a new board for HQ.

The proposal for the new board is in principle already finalised according to HQ, although its presentation will wait until the Swedish Financial Supervisory Authority (Finansinspektionen - FI) has completed its review of the bank's operations.

The Local reported in June of the mass resignation of the bank's board, a day after the organisation announced an accelerated closure settlement of its trading portfolio of 1.23 billion kronor in the second quarter, including a 297 million kronor loss announced earlier in the month.

HQ announced a rescue action earlier in June involving the temporary sale of its fund management company HQ Fonder to its principal owner Öresund for 850 million kronor amid spiraling losses. The move prompted a collapse in the company share price.

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