First BanCorp's bid to raise more than $560 million of fresh capital hit a snag this week after the San Juan, P.R., company failed to obtain enough shareholder votes to proceed with its plan to issue 150 million of new shares.
The $15 billion-asset company said Tuesday that a special meeting of shareholders had been adjourned due to the lack of a quorum. Though the vast majority of votes cast so far favor First BanCorp's recapitalization plan, only 46% of outstanding shares have voted, First Bancorp said. The majority of outstanding shares must be present at the meeting, in person or via proxy, to establish a quorum.
Under orders from regulators to boost its capital ratios, First BanCorp is planning to sell nearly 140 million shares, at $3.50 each, to two private-equity groups and other institutional investors, and more than 10 million additional shares to existing stockholders. The ailing company has said that it needs to the capital to be eligible to convert preferred stock it issued to the U.S. Treasury Department under the Troubled Asset Relief Program into common stock.
In a news release, First BanCorp said that it adjourned the meeting to give it more time to solicit proxies from its stockholders to establish the requisite quorum. The meeting has been rescheduled for Sept. 9.