B&B Investors Back Rights Issue

A £400 million sale of new shares from lending bank Bradford & Bingley (B&B) has been backed by shareholders.

Meeting in Sheffield, the investors said that the "rights issue" - which will see new stock created, and then sold to existing shareholders - should be allowed to go ahead. The decision was made despite recent falls in the value of financial stocks, which has seen shares in B&B trading below the rights issue price.

The green light also marks the launch of the third attempt that B&B, which has faced severe revenue worries as a result of the credit crunch, has made at launching a rights issue. The firm has also been severely embarrassed by the withdrawal from negotiations of private equity firm Texas Pacific, which agreed to buy a 23 percent stake in the bank earlier this year, only to back out of the deal when B&B's credit rating was downgraded by the Fitch agency.

Speaking at the meeting, B&B chairman Rod Kent said: "If we keep our heads, we will get through it…we completely understand that this has not been a comfortable process for our shareholders, our customers and our employees."

B&B is offering its new shares at 55p. However, this morning its stock was trading on the exchange at 51.75p.