Troubled RSA launches £773 million rights issue

Troubled British insurer RSA has detailed plans for a £773m share issue designed to boost its finances in the wake of costly weather-related claims and accounting irregularities in its Irish business.

Under new chief executive Stephen Hester, RSA had in February set out plans to raise up to £1.6bn 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 be concluded in April.

RSA, which had slumped to a £244m pre tax loss for 2013, said yesterday that it would offer existing shareholders three new shares at 56 pence apiece for every eight existing. The issue is fully underwritten by two banks, ensuring it raises the cash even if existing investors don’t take up their rights.