Spain's Bankia shares fall 22 percent as big dilution looms

MADRID Thu Feb 14, 2013 6:08am EST

The headquarters of Spain's Bankia bank is seen behind a red traffic light in Madrid November 28, 2012. REUTERS/Andrea Comas

The headquarters of Spain's Bankia bank is seen behind a red traffic light in Madrid November 28, 2012.

Credit: Reuters/Andrea Comas

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MADRID (Reuters) - Shares in Spain's Bankia (BKIA.MC) opened down 22.65 percent after a suspension on trading in the stock was lifted on Thursday.

The stock was trading at 0.40 euros ($0.54) at 6:01 eT after recovering slightly. The shares closed on Wednesday at 0.47 euros.

Trading in the stock was suspended just before 3 a.m. ET on Thursday, after a newspaper report said that the nationalized lender's shares would be valued at 0.01 euros each in a recapitalization.

Spain's bank restructuring fund FROB, which controls Bankia, dismissed the report, saying it had not yet decided on a valuation. It added however that existing shareholders would likely be heavily diluted in the recapitalization.

Shareholders have been bracing for big losses since the bank had to apply for European rescue funds last year.

(Reporting by Sarah White, Editing by Clare Kane)

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