Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

British insurer RSA Insurance Group made an official statement today, announcing that it is planning to raise about 773 million pounds (1.28 billion dollars) in a rights offering. The company is said to be focused on increasing its capital cushion after an accounting scandal at its Irish division.

This step of the company is considered to have been provoked by three profit warnings during the last years fourth quarter as well as by a 200-million-pound capital injection that was invested into the Irish division of RSA Insurance Group Plc. These events also accelerated the departure of former Chief Executive Officer Mr. Simon Lee earlier in 2014 and the naming of Mr. Stephen Hester, who was the previous CEO of Royal Bank of Scotland Plc, as his successor.

RSA Insurance Group Plc revealed that 1.38 billion shares are planned to be issued at 56 pence a share, which is about 40% less than the closing price yesterday and also about 33% less than the theoretical ex-rights price. The company is to provide its shareholders with the opportunity to purchase three shares for every eight they already possess.

Mr. Stephen Hester, who is the Chief Executive Officer of RSA Insurance Group Plc said in the companys statement, which was cited by the Wall Street Journal: “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.”

RSA Insurance Group Plc rose by 1.04% in London by 10:14 GMT to 94.32 pence, marking a one-year change of -19.18%. The company is valued at 3.44 billion pounds. According to the Financial Times, the 21 analysts offering 12-month price targets for RSA Insurance Group Plc have a median target of 95.00 pence, with a high estimate of 115.00 pence and a low estimate of 85.00 pence. The median estimate represents a 1.77% increase from the last price of 93.35p.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Forex Market: GBP/USD daily trading outlookForex Market: GBP/USD daily trading outlook Yesterday’s trade saw GBP/USD within the range of 1.4362-1.4481. The pair closed at 1.4366, losing 0.80% on a daily basis. It has been the 30th drop in the past 56 trading days. The daily low has been the lowest level since March 17th, when a […]
  • Commodity Market: Gold heads for best week since late August as dollar keeps pulling back from one-year highsCommodity Market: Gold heads for best week since late August as dollar keeps pulling back from one-year highs Spot Gold was poised to register its biggest weekly gain since late August, as the US Dollar continued pulling back from the recent one-year peak, making the commodity more attractive for international investors holding other […]
  • Forex Market: EUR/SEK daily trading forecastForex Market: EUR/SEK daily trading forecast Yesterday’s trade saw EUR/SEK within the range of 9.1297-9.2241. The pair closed at 9.1480, losing 0.70% on a daily basis.At 6:35 GMT today EUR/SEK was up 0.05% for the day to trade at 9.1508. The pair touched a daily high at 9.1559 at […]
  • BMW raises full-year profit margin forecast to 9.5%-10.5% rangeBMW raises full-year profit margin forecast to 9.5%-10.5% range Last week BMW AG (BMWG) raised its full-year profit margin forecast to a range of 9.5% to 10.5% from a previous range of 7% to 9%, since higher prices for new and used vehicles overshadowed the effect of supply chain-related issues.The […]
  • Forex Market: USD/CAD daily trading outlookForex Market: USD/CAD daily trading outlook Yesterday’s trade saw USD/CAD within the range of 1.3658-1.3794. The pair closed at 1.3704, losing 0.62% on a daily basis. It has been the 15th drop in the past 35 trading days. In addition, the daily low has been the lowest level since […]
  • WTI futures hold gains after EIA report, Fed meeting in focusWTI futures hold gains after EIA report, Fed meeting in focus West Texas Intermediate crude rose to the highest in a week as the Energy Information Administration reported US crude inventories fell for a third consecutive week in the seven days to December 13, albeit less than expected, while distillate […]