RSA rights issue wins support

INVESTORS in Royal & SunAlliance have given the thumbs-up to its £910m refinancing aimed at shoring up its balance sheet. The beleaguered insurer today said it had received 92% take-up of its heavily discounted rights issue, priced at 70p a share.

That will be a major relief to City investors, concerned the cash call would flop and affect investor sentiment across the UK stock market.

The new funds will enable the group to expand again. New chief executive Andy Haste said: 'The successful completion of the rights issue, along with our existing capital plans, will allow us to fund our future growth.' The shares rose 1 3/4p to 96p.

RSA was forced to pass the hat round after years of writing insurance cover at unprofitable rates. When equities crashed three years ago, it was hit by a double whammy of dwindling investment income from its vast premium flow and an underwriting deficit.

The move eventually led to sweeping boardroom changes and a series of disposals from overseas markets. But it still needed new cash to provide a buffer against liabilities over past claims, including those related to asbestos.