RSA plans £775m cash call after slumping into red

Share this article
Have your say

Insurance group RSA has fallen into the red after counting the cost of accounting irregularities in Ireland and announced plans for a £775 million rights issue to strengthen its balance sheet.

The More Than parent, headed by former Royal Bank of Scotland boss Stephen Hester, posted a pre-tax loss of £244 million for 2013, compared with the previous year’s profit of £448m.

The extent of the losses means RSA is scrapping its final dividend, and Hester admitted that any payout made at the half-year stage in 2014 was likely to be “modest”.

He said the group had “reluctantly” decided that a rights issue was the best option for bolstering its finances.

Hester added: “RSA’s 2013 results are poor and we need to grasp the nettles of both underperformance and undercapitalisation. As part of this we intend to launch a rights issue to help ensure we have the appropriate level of capital behind the group.”