Swiss Life sets price for rescue rights issue
Tuesday 19 November 2002
Swiss Life, the insurer plagued by plunging profits, regulatory investigations and accounting errors, yesterday revealed the pricing of its 1.1bn Swiss francs (£480m) rescue rights issue.
The problems at the group, which last month cost Roland Chlapowski his job as chief executive, had looked set to derail the rights issue, which was announced after the group posted its biggest loss to date, of Sfr386m in September. This then had to be restated to an after-tax loss of Sfr578m after accounting errors were discovered.
The group is raising Sfr856m through a one-for-one rights issue at Sfr79, and up to Sfr250m through a three-year mandatory convertible bond. Swiss Life shares, which have fallen 77 per cent this year, closed at Sfr160 on Friday, making the issue a 50 per cent discount. The shares closed up 7 per cent at Sfr174 on yesterday's news.
The new equity will be used to strengthen Swiss Life's capital base and regulatory solvency.
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