Sabadell set to launch rights issue

Spanish bank Sabadell has begun sounding out investors about a rights issue worth up to 1.2 billion euros, the Financial Times reported on Monday.

The Catalonia-based lender is preparing to launch the 1 billion to 1.2 billion euro share sale after first seeking the permission of its investors later this month, the FT said.

Sabadell has met investors in London ahead of finalising the rights issue launch, according to people familiar with the talks and cited by the newspaper. The bank holds an extraordinary general meeting on February 23.

It described the move as part of a cascade of recapitalisations and mergers predicted across the Spanish banking sector following strict new government regulations.

Sabadell could not be reached for immediate comment.