RSA launches £773m rights issueTuesday 25 March 2014 08.07
Troubled UK insurer RSA has set out its plans for a fully underwritten rights issue to raise £773m to restore its capital position.
RSA, which reported a £244m pretax loss for 2013 after it suffered an accounting scandal at its Irish business and large weather-related claims, said it would launch a three for eight rights issue at 56 pence per share.
The price is a discount of around 40% on yesteday's closing price.
"The net proceeds of the rights issue will be held as cash or low-risk investments in order to improve the group's capital strength and surplus over its capital requirements," RSA said in a statement.
Last month the insurer under its new chief executive, Stephen Hester, began a drive to raise up to £1.6 billion in capital, tapping shareholders for half and the rest from disposals and money saved by scrapping its dividend.
Hester said at the time he expected the rights issue to conclude in April.
RSA said today that the rights issue would enable the group to restore its capital position and keep ahead of anticipated industry capital trends, allowing the business to implement its improvement plan properly.