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Beazley successful in $300 million capital raise

19th May 2020 - Author: Luke Gallin

Specialist insurer and reinsurer Beazley has announced the successful completion of its previously announced $300 million (£247 million) equity placement.

Beazley, insurance reinsuranceBeazley said yesterday that it is raising capital in the form of an equity placement in order to support growth and take advantage of rising rates being seen across its book.

In a recent statement, the specialist re/insurer has revealed that a total of 78,501,420 new ordinary shares of five pence each in the capital of the company have been placed by J.P. Morgan Securities plc and Numis Securities Limited, at a price of 315 pence per Placing Share.

As Beazley explained yesterday, certain directors and members of the senior management team of the re/insurer have either participated in the placing, or have separately subscribed for new ordinary shares of five pence in the capital of the firm, at the placing price, pursuant to Subscription letters entered into with the company. Through the Subscription, a total of 13,085 Subscription Shares were subscribed.

So, in total, the Placing and Subscription of the New Ordinary Shares raised gross proceeds of approximately $300 million, with the Placing Price of 315 pence representing a discount of 4.9 per cent to the closing share price of 331.4 pence on May 18th, 2020.

Beazley notes that the combined issue of the Placing Shares and the Subscription Shares represents around 15% of the existing issued ordinary share capital of the company prior to the Placing and Subscription.

In its announcement yesterday, the company explained the reasoning for the capital raise, saying it wants to raise this equity to continue to support ongoing organic growth. Beazley said that, after recent loss years it has already seen rates improve across its core underwriting markets, and expects this to continue.

Beazley has made applications to the Financial Conduct Authority (FCA) for the admission of the New Ordinary Shares to the premium listing segment of the Official List, and also to the London Stock Exchange for admission of the new shares to trading on its main market for listed securities.

Following admission, Beazley says that the total number of shares in issue in the company will be 608,482,708.

Beazley is the latest to look to a capital raise to not just address the uncertainty being caused by the ongoing Covid-19 pandemic, but to also support its future growth ambitions.

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