The Royal Bank of Scotland on Tuesday said it planned to raise 12 billion pounds ($23.7 billion) through the sale of shares to existing investors in an attempt to bolster its shaky capital position. The sale, known as a rights issue, will be the biggest ever for a UK company and is needed to balance the impact of the ABN Amro acquisition and possible further pretax write-downs of 5.9 billion pounds in 2008. It also puts RBS second in the European capital-raising league table. Swiss giant UBS has raised around $28 billion through a rights issue and the sale of a stake to investors in Singapore and the Middle East since the credit crisis began. RBS also said it hopes disposals - likely including its insurance arm and Angel Trains, its train leasing company- will add roughly a further 4 billion pounds to its core capital. Other disposals are possible as long as the bank can get an acceptable price, CEO Fred Goodwin said on a conference call. “The watchword is there will be no fire sales,” Goodwin said. Under the terms of the rights issue, shareholders will be able to purchase 11 new shares for every 18 shares they already hold at a price of 200 pence a share, representing a discount of 46.3 percent to Monday's close. In order to preserve the new capital, the bank's 2008 interim dividend will be paid in shares, but it will revert to cash for the final dividend of the year. Goodwin said he expects the deal to be well supported by shareholders as there had been calls for the bank to improve its capital at previous meetings with investors. He added the deal has been fully underwritten by Goldman Sachs, Merrill Lynch and UBS. __
