HBOS looks to raise private funds for help
HBOS has asked investment bank UBS to raise a private investors’ fund to help it offload £400m of investments, as it looks to prop up its balance sheet and cut back on investments in troubled times for the banking sector, it emerged yesterday.
The UK’s largest mortgage lender has called on UBS to create a fund for around half-a-dozen investments from its integrated finance portfolio, backed by private investors.
Investors would acquire some of HBOS’ stake in firms such as Ainscough, Britain’s largest crane operator, and Keepmoat, the social housing renovator, though Bank of Scotland would retain significant interests in the assets.
The deadline for declarations of interest from potential investors falls today, with tried-and-tested backers such as Nick Leslau’s Prestbury Holdings and Sir Tom Hunter’s West Coast Capital among those thought to have been sounded out.
An HBOS spokesman said last night that plans to raise the fund have been in the pipeline for a year.
He said: “The next stage in the evolution of this Integrated Finance strategy is the creation of an Integrated Finance Fund enabling other investors – typically long-term partners of Bank of Scotland – to invest alongside the group.”
Meanwhile, the Financial Services Authority has concluded its investigation into short-selling of HBOS shares during its difficult rights issue.
The regulator found no evidence that “unscrupulous traders” had spread malicious rumours about the bank’s prospects in an effort to drive down the share price and profit having earlier short sold the shares.
But the FSA said it would continue to examine the relationship between short selling and pessimistic rumourmongering.
“Where there is evidence of market abuse, we will take enforcement – including criminal – action,” it said.