London - Britain's HBOS bank, one of the first to turn to investors for a cash boost, said Monday that less than 10 per cent of its shareholders had taken part in a rights issue of 4 billion pounds (8 billion dollars). 

Halifax Bank of Scotland said just 8.29 per cent of investors opted to buy heavily discounted shares as part of the scheme to help strengthen its balance sheet, announced in April. 

This means that the rights issue's underwriters, Morgan Stanley and Dresdner Kleinwort, have to find buyers for more than 3.6 billion pounds worth of shares by Tuesday's deadline, or accept the stock themselves if they fail to do so. 

HBOS's attempt was launched at a time when its share price stood at around 500 pence per share. Shareholders were offered two shares at the knock-down price of 275 pence for every five held. 

But since then the bank's stock has plunged in value amid fears of further big write-downs in the sector. 

Rival Royal Bank of Scotland raised 12 billion pounds earlier this year, also through a rights issue. It was backed by more than 95 per cent of investors, with shares remaining comfortably above the discounted issue price. 

HBOS spokesman Shane O'Riordain said the group had issued its rights call "in the middle of a fierce financial storm." The bottom line was that the bank would have raised the capital it required by the deadline, he said. (dpa)