RSA shares fall after insurer prices £773m rights issue
RSA’s said this morning that a rights issue, designed to help it move on from the scandal relating to its Irish business, will see it raise £773m, in line with expectations of £775m.
The insurer’s now headed up by Stephen Hester (pictured), ex-chief executive of RBS. He commented:
Following a comprehensive review of the options available to RSA, the Board believes that the Rights Issue will enable the Group to restore its capital position and keep ahead of anticipated industry capital trends, and that this will allow the business to carry out its action and improvement plans without undue risk of suboptimal decisions forced by capital shortage or instability.
The rights issue will be undertaken on a three-for-eight basis, which means existing investors can buy three new shares for every eight they currently hold, for 56p – a 40 per cent discount to Monday’s 93.4p closing price.
It's being underwritten by Bank of America Merrill Lynch and JP Morgan Cazenove.
Shares fell 0.5 per cent at the open, but are now trading down 0.1 per cent at 93.20p per share.
Source: Google