Embattled insurer RSA confirmed last night that it was considering asking shareholders for cash to repair its finances, which have been battered by accounting irregularities in its Irish division and stormy weather.
The fundraising, which could amount to pounds 800m, is part of the rescue strategy being devised by
In an unscheduled announcement before the full-year results on Thursday, RSA said that a decision had not yet been taken about fundraising, which follows the discovery of a pounds 200m hole in its finances in
The problems in
There has been speculation that the former RBS boss, in his first job in the insurance industry, has considered a pounds 350m share placement with a select group of investors as well as a rights issue - where all investors are offered the chance to buy shares - of between pounds 500m and pounds 800m. The company is worth around pounds 3.5bn.
The insurer, which owns the More Than brand, said: "RSA is considering measures to strengthen its balance sheet, including raising capital by way of a rights issue. However, no final decision has been made by the company at this time." It did not refer to the dividend that is thought likely to be scrapped or possibly paid in shares.
Hester's appointment at the start of the month has helped to restore confidence in the insurer, which is also expected to have exposure to claims from flood-hit areas of the country. There have been predictions that bad weather will cost it pounds 35m.
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