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BCP licks its wounds


Jorge Jardim

The new rights issue from Banco Comercial Português, the largest privately owned bank in Portugal, may not have come as a surprise to shareholders, who have long been aware that it has a weak capital base. But the size of the deal and the level of the discount have certainly raised some eyebrows.

The bank announced the plans for an issue after a shareholder meeting late last month. The move came just over a month after disappointing 2002 annual results were issued. At e930 million, the deal is the largest global equity offering so far in 2003.

The rights issue follows a e700 million mandatory convertible in the third quarter of last year.

In a statement, Jorge Jardim Gonçalves, BCP's chairman and founder, said: "This operation is an important initiative to attain adequate conditions to pursue sustainable consolidation and development for BCP."

Not a junk issue
The rights issue is underwritten by Merrill Lynch and UBS, which is a reassuring sign for investors. "This is not junk," says Jean-Baptiste Bellon, an analyst at Deutsche Bank. "If it was junk, no-one would have been interested in helping.

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