UK's B&B faces grilling on cash call, future

SHEFFIELD, England, July 17 (Reuters) - Shareholders in Britain's troubled Bradford & Bingley BB.L are set to grill the bank's management on its future on Thursday, when they meet to vote on a planned 400 million pound ($800 million) cash call.

With underwriters, investors and six major UK banks stepping in to support the rights issue, shareholders gathering in Sheffield, in northern England, are expected to vote in favour of the plan -- even though the mortgage bank's battered shares are still trading below the rights issue price of 55p.

The early turnout was low, however, with less than 20 shareholders at the big arena just before the meeting started.

But they will quiz B&B management and Chairman Rod Kent on their failure to hold on to a planned investment from private equity investor TPG, their outright rejection of a suitor -- entrepreneur Clive Cowdery -- and the future of Britain's biggest buy-to-let lender in a deteriorating economy.

Less than a month after denying it was planning a cash call, B&B surprised the market in May with news of a rights issue, angering some investors.

It has since been forced to overhaul its rights issue plan twice, most recently after a downgrade from credit rating agency Moody's this month prompted TPG to pull out from buying a stake.

TPG had been brought in just weeks earlier, when B&B slashed its rights issue price as trading conditions deteriorated.

The bank's current 400 million pound rights issue plan will be supported by underwriters Citi and UBS, by four major shareholders and by six clearing banks that have agreed to back the underwriters.

HSBC (HSBA.L: Quote, Profile, Research), Lloyds TSB (LLOY.L: Quote, Profile, Research), HBOS (HBOS.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), Santander's Abbey SAN.MC and Royal Bank of Scotland <RBS.L have agreed to sub-underwrite about half of the bank's planned rights issue, which could leave them with more than a third of its enlarged share base.