UK - Legal & General has stolen a march on insurance rival Royal & SunAlliance with a £786m rights issue.
A one-for-one issue priced at around 65p per share has been expected by R&SA for some time in a bid to raise up to £1bn for the beleaguered group.
But R&SA has been beaten to the market by L&G which says proceeds from its issue will be used to maintain corporate growth and avoid any interruption in the next two to three years due to shortage of capital. Expansion would continue to be purely organic.
Cash-strapped R&SA has already sold off several of its operations including its group risk business to Canada Life for £60m and its asset management division to Friends Ivory & Sime for £240m.
It has also closed its life and pension arm to new business – the first step in the eventual wind-up of its UK life division and the loss of 1200 jobs.
Other City analysts are also concerned about the deficit in the R&SA staff pension scheme which UBS Warburg estimated was £637m at the end of July. They believe some of the money raised in a cash-call may have to be used to plug this hole.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers