A bit busy lately but here is some Sunday papers news.

TIMES

Lloyds Banking Group is weighing up plans for a multi-billion pound share issue to cut its dependency on the taxpayer

From The Sunday Times -- August 9, 2009

Lloyds plots share sale to cut state tie.

Eric Daniels pressed to stage rights issue to reduce 16bn government insurance fees.

LLOYDS BANKING GROUP is weighing up plans for a multi-billion pound share issue to cut its dependency on the taxpayer.

The bank is considering a partial withdrawal from the governments asset protection scheme a taxpayer-backed insurance policy designed to shelter banks from the worst losses on their bad loans.

Eric Daniels, the chief executive of Lloyds, is said to believe the fees attached to the scheme 16 billion are too high, and pass too much control to the government. Its 43% stake in Lloyds would rise to more than 60% if the deal went ahead as originally drafted.

Lloyds agreed to put 260 billion of troubled loans into the scheme when it was outlined in March. It is understood that the bank and some of its largest shareholders are considering a substantial reduction in its participation. Bankers believe the final value of assets placed into the scheme could fall by as much as half.

If the government agreed to the move, Lloyds would instead shore up its balance sheet by raising substantial sums from the sale of new shares. Analysts estimate it would have to raise 10 billion to 15 billion if it pulled out of the scheme altogether. Some analysts believe shareholders would be better off to agree to this than pay the government fees.

A City rebellion is emerging over the issue, with a number of hedge funds now threatening to vote against Lloyds participation in the asset protection scheme. It needs to be approved by a shareholders meeting, likely to be held later this year. Much of the recent activity on Lloyds share register has been fuelled by hedge funds, say market sources.

Many of Lloyds traditional investors, however, feel it would be foolish to vote against the scheme while the economic outlook remains uncertain.

Daniels said last week that bad debts at Lloyds had already peaked, after unveiling 13.4 billion of impairments for the first six months of the year. Based on Lloyds new forecasts, the asset protection scheme may no longer represent good value for the banks shareholders.

More than 150 billion-worth of assets headed for the scheme are commercial property loans, where Lloyds has already taken huge losses. Paying the government to insure against further falls in value seems illogical, according to some investors.

One analyst said: The government is charging 16 billion for the scheme and, based on what Lloyds are now saying, it looks like they will only be able to claim back about 10 billion on the insurance. So, at the moment, it looks like they will lose 6 billion.

Out this morning ,after the Sunday Times article ,i shall keep a close eye .

If it's a Rights Issue you will not be able to take up any rights if you hold no stock.
Just a thought.
Of course the value of any stock you currently hold will depreciate, but the rights issue may well be very favourably priced.

at 10p, lol

Harry i had a long spreadbet from 80p so wanted to take the profit ,however i was looking to buy shares for the long haul , i'm just thinking i may be able to buy in cheaper .

If LLOY are forced to sell assets by the EU they may not need a rights issue, sounds like newspaper talk to us.

i was right last week about my short at 105p. lloy is knackered cos of halifax

The Lloyds announcement should be positive for the stock in the long run with the resulting reduction of debt.
However,it looks at the mo that some are taking cash off the table after a good run,and why not?

Looks like the big sell off is setting in - all they need now is issue their rights issue and it'll be back down to 70p - Surprised RBS is holding above 40p to be honest, another 6 months of turmoil in this sector methinks.

Watching carefully ,,,glad i closed yesterday...

Do we know yet if it's a general share issue or a Rights Issue? Would like to sell some of my profitable holding, but if it's a R/I then the downside would be the loss of the Rights entitlement.

Lloyds need to make a statement - and clear up all this uncertainty

Maybe after all there is no R I in mind, just press comment as usual..........

MARKET REPORT

Banking shares were on offer, with Royal Bank of Scotland and Lloyds falling in response to press reports that they are closing in on a deal with the government on how to insure loans granted under the 580bn asset protection scheme. The shares fell 0.7p at 44.61p and 5.95p at 91.94p, respectively, with Lloyds the top FTSE100 loser.

i was right bang on last week..........still going lower this dog.

no need for all the abuse from others, rather childish to put it lightly

Marni - care to suggest a price where its going to stop ?

Now its dropped below 90p, it could go anywhere now over the next couple of days - I'll get back in around the 70p mark like i said last week (sold at 97p) - if they do have a rights issue if could fal abck to 50p levels. best to leave well alone at the minute

There is support at 60p, but as nordcaperen says best to leave alone for now. After selling out last week, I am looking to get back in lower down for short term trade, as always it's just a matter of timing.

marni

re - no need for all the abuse from others, rather childish to put it lightly

Are you talking about YOURSELF?

I will ask "hyleo98"?

you must have - dementia -

marni

Maybe you should it your words ..........


marni - 26 May 2009 20:29 - 139 of 565
hyleo cant pick winners......he only looks for shares that plummet and then "borrows" peoples shares........i wish i could borrow a posh house in best area

marni - 27 May 2009 11:51 - 147 of 565
same here........i make more from master than that idiot hyleo.

marni - 01 Jun 2009 21:32 - 186 of 565
they are away to find a proper job.........un fortunately we are now in a bull market and this could last at least 5 years plus.

err, unfortunately due to shorters, there aint many jobs in the country so they might be on dole for many years to come