British bank HBOS has revealed today that less than 10% of shareholders took part in its £4 billion rights issue.
The group, which owns Halifax in Ireland, said just 8.29% of investors opted to buy heavily discounted shares as part of the scheme to help strengthen its balance sheet.
It potentially saddles the rights issue's underwriters, Morgan Stanley and Dresdner, with more than £3.6 billion worth of the new shares.
The investment banks have the next two days to try to sell them at a profit, and will be forced to accept the stock themselves if they fail to do so.
The low take-up means it is the worst UK corporate fund-raising exercise since BP tried to raise £7 billion immediately after the stock market crash of 1987.
HBOS's attempt was launched back in April when HBOS's share price at the time was around the 500 pence mark. Shareholders were offered two shares at the knock-down price of 275 pence for every five held.
But since then the bank's stock has plunged in value amid fears of further big write-downs in the sector and general economic gloom, severely dampening the appetite of investors to buy the new shares.
HBOS shares closed 6% lower at 264.50 pence this evening in London.
