DEALTALK-StanChart points way to 2-week UK rights issue
* UK aims to cut rights issue period to 16 days from 39
* StanChart to complete fundraising in 3 weeks
* Shorter timeframe will help as more cashcalls loom
By Steve Slater
LONDON, Nov 27 (Reuters) - Standard Chartered (STAN.L) moved into the second phase of its 1.8 billion pound ($2.8 billion) fundraising on Thursday, showing that quick rights issues are possible and deals next year could be completed in two weeks.
Britain this week unveiled plans to speed up the rights issue process to limit the period of risk a company faces during the cashcall.
A trio of banks -- Royal Bank of Scotland (RBS.L), HBOS HBOS.L and Bradford & Bingley BB.L -- suffered during rights issues this year as speculators took advantage of jittery markets to undermine confidence in the companies.
Each bank raised the cash, but the damage caused by the speculators helped bring them to their knees and each of the three was later bailed out in emergency rescue deals.
Pressure to speed up the process has intensified as banks and other companies may need more capital as an economic downturn deepens.
Barclays (BARC.L) sidestepped a rights issue when it raised 7 billion pounds this month, saying it wanted to avoid the risks of the process. It raised the funds privately but angered investors by not giving them first option on the deal.
Other companies have seen what happened to the banks and do not fancy a prolonged period of instability, bankers said.
"Companies don't want to be hung out to dry. Once they've decided, they need to move quickly," one banker said.
UK banks could need to come back for more capital if the economy falls into recession and bad debts jump. Other sectors that may need to consider rights issues include insurers, retailers and property firms, bankers said.
UK companies have raised 23 billion pounds from rights issues this year. Banks account for almost 17 billion pounds, including a record 12 billion by RBS, while Imperial Tobacco (IMT.L) raised almost 5 billion.
