B&B wins shareholder approval for rights issue

Troubled mortgage lender Bradford & Bingley has won the support of its shareholders for its proposed rights issue.

Some 93 per cent of all proxy votes were in favour of the £400 million issue, with just four per cent opposed and three per cent choosing to abstain.

While expected, the deal remains controversial, as shares in Bradford & Bingley are still trading well below the proposed rights issue price of 55 pence.

At 11:00 BST this morning, shares in the lender were trading at 51.25 pence, up 1.99 per cent over the day.

However, the company's fortunes have been buoyed by the support of its major shareholders and a number of major banks stated they would back the rights issue.

"We're pleased that our shareholders have voted in favour of the enlarged rights issue today, the proceeds of which will strengthen our capital base, ensuring we remain one of the better capitalised banks in the UK," said Rod Kent, B&B executive chairman.

Mr Kent also confirmed no executives will receive a bonus this financial year, while the search for a new chief executive was "well under way" at the Emergency General Meeting (EGM).

His comments may have fallen on deaf ears however, as a mere handful of shareholders attended the meeting in a 12,000 seater arena in Sheffield.

Bradford & Bingley was forced to return to shareholders after a proposed deal with American investment organisation Texas Pacific Group (TPG) fell through, following a lowering of the bank's credit rating.

Chris O'Toole