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.
The Pensions Regulator (TPR) has granted 11 master trusts extensions to apply for authorisation, as it confirms it has received 22 applications ahead of the 31 March deadline.
Aegon Master Trust, Fidelity Master Trust and Ensign have sent off their authorisation applications to The Pensions Regulator (TPR).
Self-administered pension funds spent £15bn on payments to pensioners in Q4 2018, but received just £12bn in contributions (net of refunds), Office for National Statistics (ONS) data reveals.
Aberdeen Standard Investments (ASI) and Gresham House are to team up to form a joint venture.