RSA reveals details of discounted £773m cash call

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Insurance group RSA today revealed the details of its £773 million cash call, which chief executive Stephen Hester announced last month after the More Than parent slumped into the red.

Hester, the former Royal Bank of Scotland boss, said RSA shareholders will be able to buy three shares for every eight they hold, at a 40 per cent discount of 56p a share.

He said: “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.”

Costs associated with accounting irregularities in Ireland pushed the insurer to a pre-tax loss of £244m for 2013, compared with the previous year’s profit of £448m.

The rights issue is being fully underwritten by Bank of America Merrill Lynch and JP Morgan Cazenove.