RSA faces right royal costs

EMBATTLED insurer Royal & SunAlliance will have to pay £48m in costs for its bumper £960m rights issue as it reels from multi-million pound payouts to a horde of departing directors.

The three banks backing the cash call - Goldman Sachs, Merrill Lynch and Cazenove - share £35m. The rest is VAT costs.

The accident-prone insurer has already shelled out £3.94m to departed directors Paul Spencer, Julian Hance, Anthony Forbes and ousted chief executive Bob Mendelsohn - who got a controversial £2.45m pay-off.

Interim chief executive Bob Gunn, who leaves this month following the arrival of Andy Haste, took home £995,000 in salary and bonuses for 2002. Top ups mean his pension pot is worth £5.5m. Mendelsohn has a £3.9m pension pot.

RSA shares slid 8 3/4p to 113 1/4p on worries the 70p-a-share rights issue will flop. Before announcing the cash call, RSA was 154p.