Italian oil service company Saipem has decided to issue new equity shares worth a total of EUR 2bn.

The share emission will extend preferred purchase options for existing shareholders, the company informs in a statement Wednesday.

The capital raise is met by dissatisfied investors sending Saipem's share price diving 16.3% shortly after noon Wednesday in Milan trading.

Saipem will issue a total of 1,974,327,430 new shares.

Existing shareholders will be given the option of subscribing for 95 new shares priced at EUR 1.013 a piece for each currently owned share.

According to Bloomberg News, this equates to a theoretical 30% discount relative to the share price of EUR 42.03 at closing trading hours Tuesday.

The subscription period runs from June 27 until and including July 5.

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