Zurich Insurance is asking shareholders for a massive boost in authorized capital. This would leave the insurer with wiggle room for a sizable cap hike.
Zurich Insurance is taking steps which could result in the insurer raising as much as 8 billion euros in capital, Italian newspaper «Il Sole 24» (in Italian) reports.
The insurer plans to limit its issue of new shares to less than 20 percent of its current capitalization, according to the newspaper's sources. This would allow Zurich to raise up to 13 billion euros, but the insurer plans to ask shareholders for roughly 8 billion euros.
Financing Growth Projects
The first step is for Zurich's shareholder meeting to approve raising share capital to a maximum of 45 million shares, according to the insurer's invitation to the annual general meeting.
This would effectively enable Zurich to tap the funding it wants to finance growth projects, as well as to ensure its own solvency against extreme payout claims.
The insurer would be able to issue new shares until next March, and roughly one-third of a potential cap hike could be allotted to a new, unnamed shareholder. Chief Executive Mario Greco said in November that mergers and acquisitions have no priority for the firm, which failed in its attempt to take over British insurer RSA 18 months ago, and that it would not look at large transactions.
