SAO PAULO, Feb 3 (Reuters) - Brazil’s Banco Bradesco SA , the country’s second largest private bank, proposed on Wednesday a capital increase of 8 billion reais ($2.05 billion) using its own reserves and granting new shares to current shareholders free of charge, the bank said in a regulatory filing.
The announcement comes only hours after the bank had canceled a share offering of up to 3 billion reais, citing market volatility.
Bradesco said in this latest announcement that it will use profits reserves to increase its share capital from 43.1 billion reais to 51.1 billion reais, issuing 504.8 million shares that will be granted to shareholders.
The new shares will be distributed in a proportion of 1 new paper to each group of 10 shares owned by investors.
Bradesco said one of the objectives with the measure is to comply with some local legislation regarding limits to its profits reserves and also to comply with its own statute.
“Besides that, a larger number of shares in circulation could generate an increase on deals and allow for an adjustment in the price of the paper, making it more attractive and accessible to a larger number of investors,” said the bank in the filling.
The proposal is to be voted by shareholders at a March 10 general assembly.
The operation is subject to prior approval by Brazil’s central bank. (Reporting by Marcelo Teixeira; Editing by Bernard Orr)