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Westpac has given eligible shareholders the opportunity to apply for up to $30,000 of new fully paid ordinary shares after opening its share purchase plan (SPP) as part of its capital raise designed to generate approximately $2.5 billion in funds.
The SPP, which is targeting approximately $500 million, follows the $2-billion institutional share placement completed on 5 November following the release of the bank’s full-year results.
However, Westpac has noted that it could scale back applications or issue a higher amount depending on demand from investors.
The SPP is only open to shareholders who were registered holders of shares at the record date (7am on 1 November), and shown on the register to have an address in Australia or New Zealand.
Eligible shareholders will be able to apply for SPP shares at the lower of:
- $25.32 per SPP share, being the price paid by institutional investors under the institutional placement; and
- the VWAP2 of Westpac shares traded on the ASX during the five trading days up to, and including, the SPP closing date (expected to be 2 December 2019), less a 2.0 per cent discount, rounded to the nearest cent.
The SPP offer is set to close at 5pm (Sydney time) on 2 December 2019.
Westpac also noted that SPP shares will rank equally with existing shares from their date of issue (expected to be 11 December 2019), and will not carry an entitlement to receive the 2019 final dividend, as the SPP shares will be issued after the record date for the 2019 final dividend.
According to Westpac, the capital raise will help provide an increased buffer above the Australian Prudential Regulation Authority’s “unquestionably strong” common equity tier 1 (CET1) capital ratio benchmark of 10.5 per cent.
The bank added that the raising would also create “flexibility for changes in capital rules” and for “potential litigation or regulatory action”.