RSA seeks calm from investors after stock slide

 
Michael Bow
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RSA INSURANCE yesterday scrambled to reassure shareholders about its future after investors wiped more than £260m off the company in the wake of chief executive Simon Lee’s resignation.

Chairman Martin Scicluna and senior executives have spent the weekend speaking with top investors about the next steps for the firm after it flagged a £130m black hole at its Irish unit, sparking Lee’s departure on Friday.

The firm is thought to have come under pressure from some shareholders to put itself up for sale, with a disposal to a large insurance giant being touted.

The company has ruled out a rights issue to raise the cash but is reviewing how to shore up its balance sheet before a February deadline.

“We’re having frank and open conversations with investors. Nothing has been ruled out and nothing has been ruled in,” said a source close to the firm.

The FTSE 100 company, which owns the More Than insurance brand, has been rocked by problems at its Irish unit, where three directors have been suspended after accounting issues were found during a routine audit.

The company’s share price fell to as low as 78.5p on Friday after Lee’s resignation, before recovering to close at 92.5p. An RSA spokesman said the firm had nothing to add beyond Friday’s statement.