The U.K.’s Royal & SunAlliance announced that shareholders have overwhelmingly approved plans for a new rights issue at a special meeting held yesterday.
More than 572 million shares, representing 39.76 percent of the outstanding share capital, voted to authorize the increase, and also gave the directors authority to allot shares.
Although slightly less than 41 percent of the company’s 1.439,989,222 billion shares were voted, more than 95 percent of those who expressed a choice favored the rights issue. R&SA announced plans earlier this month to raise £960 million ($1.58 billion) by offering existing shareholders one share for each share held at 70 pence (around $1.15), considerably below the levels at which the shares have been trading – in the 113-115 pence range (between $1.85 and $1.89).
The company shelved plans for a similar rights issue last year, mainly due to the depressed conditions in the equity markets. It will use the funds primarily to improve the condition of its balance sheet, following the need for a hefty increase in reserves, principally in the U.S., due to increased liabilities for asbestos related claims and to fund the cost of restructuring large portions of its R&SA USA subsidiary.
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