Corporate financial management Essay Example | Topics and Well Written Essays - 2000 words

Corporate financial management - Essay Examplen.d.). Lloyds has strengths as well as products, which be from both the companies that include Lloyds TSBs approach towards risk and HBOSs leading bancassurance businesses. The ships companys septuple brands provide service to the customers regarding pricing as well as positioning in order to dressing and attract more of the market. The two main brands of the company in England are Lloyds TSB as well as Halifax while in Scotland the companys main brand is Bank of Scotland. The company tries to keep its be down and improve its services to customers as the company can deliver effectiveness through divided up services (Lloyds Banking Group, n.d.). Investigation on Rights Issue of Lloyds Banking Group There are several means of ski lift capital in an organisation. One such means applied by Lloyds Banking Group has been right have it off. The company sold its impertinent shares at discount. It was found that the existing shareholders o f the company were offered new shares in ratio to their retentivitys. The left hand out shares that were not sold were bought by other investors as well as investment banks underwriting the passage that has promised to swab up the unwanted shares in order to ensure that Lloyds gets its money. The reason behind Lloyds raising the depot has been that the bank wanted to evade from being involved in the establishments toxic Assets fortress Scheme (APS). The bank had 43pc owned by their taxpayers. Originally, in order to insure ?260 billion in loans from the scheme, Lloyds Was anticipate to pay ?15.6 billion and thus increasing the taxpayer stake to 62pc. Royal Bank of Scotland that took part in the APS end up being 84pc which were owned by the Government after putting its risky loans for insurance. However, Lloyds has to pay the Government a fee of ?2.5 billion in response for the protection that was by now offered by the taxpayers since the resoluteness of the scheme in 2009 (T elegraph, 2009) The offer on the table for the shareholders was that Lloyds, for every current share owned offered 1.34 new shares at a deep discount of nigh 37p each. The most important consideration has been the cost associated to the mean(a) shareholders. The typical investors who owned 740 shares were provided the opportunity to retain their stake in the company by buying around 991 new shares at a price of ?366.67 (Telegraph, 2009). It can be analysed that the fees that Lloyds had to pay was huge. The company planned to authorize ?500m on all its cost out of the ?13.5billion raised by them (Daily Mail Reporter, 2009). It was further proposed that if the shareholders of Lloyds dont do not take any measure at all then Lloyds is going to conduct the shareholders allocation of shares on its behalf and send them the profit by cheque (MoneyHighStreet Staff, 2009). For the 2.8 million private shareholders the average holding was 740 shares, which denotes that if they assume their rights in full, they would have had to pay almost ?370. Small investors were involved in right issue of Lloyds. Some were the institutions such as pension funds and investment firms along with the taxpayers. However, for those investors who didnt take up the offer had to receive a cheque from the bank for the sale of their nil-paid rights. Moreover, the underwriters had guaranteed to buy the shares that was not subscribed for by