Westpac (ASX:WBC) To Allow Investors To Cancel Their Capital Raising Shares


Companies and indices mentioned:
,


Westpac (ASX: WBC) has been talking with ASIC about what to do about its capital raising.

Westpac Banking Corp (ASX: WBC) is one of Australia’s ‘Big Four’ banks and a financial-services provider headquartered in Sydney. It is one of Australia’s largest lenders to homeowners, investors, individuals (via credit cards and personal loans) and business.

Westpac’s Solution

The AUSTRAC troubles have come just as it was doing a capital raising to raise a few billion dollars to improve its balance sheet and make sure it meets the “unquestionably strong” benchmark.

After talking with Australian Securities and Investments Commission (ASIC) Westpac has decided to provide a withdrawal option for share purchase plan (SPP) applicants who applied for shares prior to the AUSTRAC announcement on 20 November 2019 announcement. The bank provided details in the announcement for how to do it.

In terms of the ongoing capital raising, Westpac reminded investors that the capital raising price will be the lower of $25.32 or a 2% discount to the average share price of the five days up to the SPP closing date of 2 December 2019 – this period started on 26 November 2019.

Westpac is facing flack from institutional fund managers who took part in the capital raising at a higher price but wasn’t aware yet of the AUSTRAC issues.

According to Australian Financial Review reporting, Wilson Asset Management said yesterday that the costs for Westpac will keep mounting from this scandal.

A new CEO at Westpac will do a major clean-out at the bank which would come at a time when there’s already weak credit growth, lower net interest margins (NIMs) and very low central bank interest rates.

Wilson Asset Management lead portfolio manager Matthew Haupt from WAM Leaders Ltd (ASX: WLE) said: “The new chief executive will kitchen sink it. There will be more to come out.” 

WAM Chairman Geoff Wilson said the Westpac’s CEO and board’s attempt to ride it out was out of touch with community expectations. He said: “That’s what they totally missed. Definitely I think you should vote against everything” referring to the upcoming Westpac annual general meeting (AGM).

Here are 3 stocks I own in April 2020...

Amidst the COVID-19 confusion, there are some companies still growing FAST (think: online meetings through Zoom, streaming companies like Netflix and eHealth services provided by Teledoc).

While the world grapples with COVID-19, some companies are still growing rapidly. The entire cloud computing market is valued around $US210 billion but if you ask me, it seems clear as day that this market is only going to get bigger in 2020 and beyond.

That's why our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back. He owns all three of them right now!

Claim a FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.

Our report is 100% free and unlocks hundreds of hours of bonus content.

Simply click here to access the report.


Disclaimer and warning: This information is published by The Rask Group Pty Ltd and contains general financial advice and information. That means, the information/advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

Jaz Harrison

Jaz Harrison

Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.