Commerzbank, Germany's second-biggest bank, said Tuesday the subscription price for new shares in its planned capital increase has been set at 4.50 euros ($5.85) apiece, meaning it stands to raise up to 2.5 billion euros in all.
Commerzbank said in a statement that it is issuing a total 555.5 million new shares.
The capital increase is taking the form of a so-called rights issue where existing shareholders can apply for the new shares.
For every 21 shares held, shareholders can apply for 20 new shares, the statement said.
The subscription period runs from May 15 to May 28.
Commerzbank had already announced previously that it planned to issue new shares in order to pay back state bailouts received during the 2008-2009 financial crisis.
In preparation for the move it had cut in 10 the number of its shares in issue at the end of April.
"As a result of the transaction, the capital structure of Commerzbank and its future ability to pay dividends should improve significantly," the bank said.
When the capital increase has been completed, the shareholding of the federal government in Commerzbank is expected to decrease from about 25 percent at present to less than 20 percent, the bank said.