US private equity firm Texas Pacific Group has agreed to take a 23% stake in Bradford & Bingley (B&B).
All shares will be issued at 55p, down from an initially planned 82p underwriting price.
The bank also warned on deteriorating economic conditions, with a decline in net interest margin and increasing arrears. Underlying profits for the first four months halved to 56 million pounds, it said.
B&B CEO, Steven Crawshaw, stepped down this weekend, citing cardiovascular problems.
Shares in B&B plummeted by almost 30% this morning at one point, forcing the FSA to briefly suspend trading as it announced the impact that bad debt has had on the business.
They are currently trading at 67p (down 23% on last week's closing).