June 4, 2014 / 7:05 PM / in 4 years

Deutsche Bank delays pricing in cap hike setback

FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE) delayed by at least one day plans to price around 6.3 billion euros ($8.6 billion) in new shares on Wednesday, market participants said, in a setback to its plans to bolster its balance sheet and boost growth.

The rights issue forms the lion’s share of an 8 billion euro ($11 billion) capital hike announced by the bank in mid-May to strengthen its capital base and to see through a costly restructuring.

“It’s a technical issue. It has nothing to do with demand,” said one market participant.

Another market participant confirmed that Germany’s flagship lender would miss the pricing on Wednesday, the target date that the bank originally set when it unveiled the issue.

The unexpected delay is unlikely to signal serious problems with the issue but may prove embarrassing for Deutsche, which has asked shareholders for fresh capital twice in two years.

Deutsche Bank declined to comment.

    Market participants have pointed to a price range between 21 euros and 21.50 euros in recent days but said the range was subject to fluctuations depending on the bank’s actual share price.

    A price of 21 euros would be the lowest possible level for Deutsche to fulfill its goals and close to the price indicated when it announced the deal. Deutsche plans to tap shareholders for 6.3 billion euros and has placed another 1.75 billion euros in shares with a member of the Qatari royal family.

    Germany’s largest bank has spent the past two weeks marketing the rights issue to its shareholders with promises of both cost cuts and future growth. Investors have broadly welcomed the issue, saying it will put concerns about capital weakness to rest for at least a year as co-Chief Executives Anshu Jain and Juergen Fitschen complete a turnaround plan.

    Deutsche shares have fallen some 14 percent since the start of the year compared with a 4 percent rise on average by rivals .SX7P, partly due to expectations of a dilutive capital hike.

    Reporting by Arno Schuetze; writing by Thomas Atkins, editing by David Evans

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