Troubled Danish bank Amagerbanken has enjoyed an explosive morning on the stock exchange, following the news on Friday that a large group of investors will inject a significant amount of capital into the bank that, according to financial magazine Økonomisk Ugebrev, will make it 99 percent sure that the bank will be saved.
Shares in the bank this morning rose from 8.50 to 17.00 kroner, an increase of 100 percent. The share price increase followed Friday’s positive news that a large shareholder in Amagerbanken Finansgruppen would inject new capital into the bank, and that the bank has negotiated new terms with the Ministry for Economic and Business Affairs, which means its state loan cannot be converted into share capital and that its shareholders are secured against their shares being watered-down.
Under the terms of the original deal the conversion would have taken place should the bank’s own capital fall under a certain percentage of the bank’s core capital. The bank has loaned a total of 1.106 billion kroner from the state. The bank now has until September 15 to raise 750 million kroner to be eligible for state aid through the Bank Package II.
A share issue to raise these funds that was due to end last week has now been extended until next Monday.
The Copenhagen Post
