Specialist re/insurer Hiscox has welcomed the strong support it received from both existing shareholders and new investors for its recently completed capital raise.
Alongside its first-quarter 2020 trading statement, Hiscox confirmed plans to raise approximately £375 million through the non-pre-emptive placement of new ordinary shares of 6.5 pence each in the capital of the firm.
The company has now commented after the successful completion of the capital raise of 57,693,425 new Ordinary Shares, which, together, raised gross proceeds of approximately £375 million.
According to Hiscox, the placing price of 650 pence represents a discount of 6.1% to the closing share price of 692.4 pence on May 5th, 2020.
In total, the new shares (comprised of placing shares and subscription shares) being issued represent, in aggregate, around 19.99% of the existing issued ordinary share capital of Hiscox prior to the capital raise.
“Hiscox consulted with a number of its major shareholders prior to the Placing and has respected the principles of pre-emption through the allocation process. The Company is pleased by the strong support it has received from existing shareholders and new investors,” stated the firm.
The re/insurer has said that the capital raise would position it well to respond to a range of adverse scenarios as a result of the COVID-19 impact. Currently, Hiscox is in the midst of legal disputes over its refusal to pay certain COVID-19 related claims in the UK, with the company warning that its losses related to the pandemic could reach as much as £175 million.
Hiscox has reiterated that its capital levels remain robust and its liquidity and funding means it is able to respond to any COVID-19 related liabilities. And, has consistently linked its capital raise to anticipated opportunities in US wholesale and reinsurance, as well as positive momentum in its London Market business, where capital contraction is expected to drive rates up further.
In conjunction with the placing of shares, certain directors and members of senior management at the company have agreed to subscribe for an aggregate of 92,302 new ordinary shares in the capital of the company, at the placing price.
Hiscox notes that applications have been sent to both the FCA and the LSE respectively for the admission of the new shares. After admission, the total number of ordinary shares in issue in Hiscox will be 353,828,050.