Lloyds Banking Group, which has been supported by billions of pounds of public money via a government bailout, announced it will launch a rights issue to raise £13.506 billion (around $21.6 billion), offering shares at 37 pence apiece.

The 37p price is slightly above the amount mentioned in the financial media today. The Financial Times, for example, had reported that the price was expected to be 36p. In any event, the price is at a heavy discount. Lloyds said the issue price is a 59.5 per cent discount to the closing price level of ordinary shares on 23 November.

The move is part of plans by the London-listed group – which contains a large wealth management arm – to raise £22.5 billion in capital to bolster its balance sheet. Lloyds, along with its peer, Royal Bank of Scotland, has been hit by the financial crisis, leading to a large government bailout. Lloyds’ bad debt situation soured dramatically when it agreed to take over rival HBOS, a group with heavy exposure to the badly-hit UK property market.

As a result of European Union rules governing state aid to private firms, Lloyds is embarking on a programme to spin off some of its businesses and slim down its operations.

The rights issue will involve issuing 1.34 new shares for every one existing ordinary share held at the record date, Lloyds Banking Group said in a statement.

A general meeting on the issue will be held on 26 November.