Deutsche Bank's €8bn Capital Increase Delayed Due to Procedural Issue

A procedural bottleneck in a German court has delayed Deutsche Bank's multi-billion dollar capital increase plan by several days, according to Reuters.

The news agency, citing three market sources, reported that a Frankfurt court took longer than expected to record Qatari investor Sheikh Hamad Bin Jassim Bin Jabor Al-Thani's €1.75bn ($2.4bn, £1.4bn) share purchase into the shareholder registry.

Al-Thani, the biggest investor in the bank, is taking part in the capital hike scheme and has so far purchased 60 million of the 360 million new shares issued by the bank through investment vehicle Paramount Holdings Services.

The second part of the capital hike plan involving a €6.3bn rights issue cannot go ahead until the problem is solved. Nevertheless, the issue is not threatening the bank's plan to increase its capital, according to Reuters's sources.

"It's a technical issue. It has nothing to do with demand," a market participant told the news agency.

Al-Thani, a member of the Qatari royal family, is expected to invest more than €2bn and hold about 6% stake in the bank at the end of the €8bn capital-hike scheme.

The bank was to price its rights offer on 4 May. Market participants have pointed to a price range between €21 and €21.50 in recent days, adding that the range was subject to fluctuations. The proposed range represents a hefty discount on the German banking giant's current share price.

The proposed capital hike will bolster the bank's financial strength, its core Tier 1 capital ratio, by about 230 basis points to 11.8% of its assets. This stood at 9.5% weighted by riskiness, at the end of the first quarter of 2014.

Investors have welcomed the bank's move, saying it will help ease concerns about its capital weakness for at least a year.