Yahoo Finance RBS settles with more shareholders over 2008 rights issue claims
Royal Bank of Scotland has reached a settlement with some of its shareholders over its controversial £12bn rights issue in 2008, narrowing the outstanding legal claim against the lender to about £500m.
The bank, which is 71pc owned by the taxpayer, is scrambling to avoid a lengthy court battle with investors who claim they were misled about the lender’s financial health when it tapped them for cash, just months before its £45.5bn bail-out during the credit crunch.
The trial over the dispute is due to start next month and Fred Goodwin, RBS’ disgraced former chief executive, is scheduled to take the stand in June.
Five claimant groups of investors were originally seeking about £4bn from RBS over the allegations but in December the bank settled with four of them, when it set aside £800m in an attempt bring an end to the litigation.
RBS said today that it had reached a deal with shareholders representing 40pc of the value of the remaining group of claimants, a move that could pressure the hold-outs to settle before the trial starts.
The latest investors to settle will receive 43.2p for each pound they invested in the rights issue, 2p more than the settlement struck with the four other claimant groups to account for their slightly higher legal costs.
The agreement is worth £80m and the slightly more generous terms lift the overall cost to RBS of settling the allegations to about £808m.
It means the bank has now settled 87pc of the original claim by value.
Ross McEwan, RBS’ chief executive, said he was “pleased” with the agreement and added: “We will continue to explore the possibility of settlement with the remaining claimants but if we cannot settle on agreeable terms we will defend the claims at trial”.
RBS has already spent more than £100m preparing its defence, a bill that is expected to rise to £125m if it goes to court.
A spokesman for the remaining claimants, which include members of RBS staff, said: “We are pleased that some members of our group have been able to come to an agreement with the bank.
“However, we remain resolute in our fight for justice for retail shareholders and the numerous institutions that remain in this litigation. We are funded for the trial ahead which is due to commence next month.”
