British mortgage bank Bradford & Bingley won shareholder backing for a 400 million pound rights issue rescue but not until executives were quizzed on the troubled fundraising and the lender's future.
Shareholders voted in favor of the deal on Thursday, as expected, after underwriters, big investors and six major UK banks stepped in to support the rights issue, even though the mortgage bank's battered shares closed at the rights issue price of 50.25p.
Some 93 percent of votes were in favor of the rights issue from the proxy votes appointed, with 3 percent against and 4 percent withheld.
The high profile troubles at the bank failed to stir much excitement among investors, however, with only 56 shareholders attending the event in a 12,000-seat arena in Sheffield, northern England.
Peter Hepworth, a retired stockbroker with a "substantial" shareholding, criticized the board and accused it of letting the underwriters of an original rights issue "off the hook."
"The whole banking sector has been totally irresponsible...saying we have all got it wrong doesn't make it right," Hepworth said.
"Shareholders are losing faith in the way the company is being managed."
Rod Kent, B&B's chairman, said no executives would receive a bonus this year and the bank's search for a new chief executive was "well under way."
"We completely understand it has not been a comfortable process for shareholders, customers and employees... (but) it will pass. If we keep our heads we will trade through it," Kent said.
Troubled Cash Call
B&B has been forced to overhaul its rights issue plan twice, most recently after a downgrade from credit rating agency Moody's this month prompted U.S. private equity investor TPG to pull out of buying a stake.
It has also been criticized for rejecting a suitor -- entrepreneur Clive Cowdery -- and faces a tough outlook as Britain's biggest buy-to-let lender in a deteriorating economy.
The 400 million pound rights issue plan will be supported by underwriters Citi and UBS, by four major shareholders and by six clearing banks that have agreed to back the underwriters.
HSBC, Lloyds TSB, HBOS, Barclays, Santander's Abbey and Royal Bank of Scotland have agreed to sub-underwrite about half of the bank's planned rights issue, which could leave them with more than a third of its enlarged share base.
B&B shares closed 7.5 percent higher, helped by a broad sector rally on Thursday, and closed above the 50.25p rights issue price, but less than a tenth of its value at its 2006 peak.
Earlier this week, rival mortgage bank Alliance & Leicester, whose shares have also been hit in the market turbulence, agreed to be bought out by Spain's Santander in a surprise 1.3 billion pound deal -- a fraction of its value a year ago.
But despite a knockdown price, few expect buyers to step forward for B&B, with even Cowdery indicating he is not prepared to return to the fray.
That leaves the bank alone to face months of pain in the UK economy and mortgage markets, with its model focused on buy-to-let home loans as yet untested by recession.