Brazilian reinsurer IRB Brasil Re has successfully raised $380 million via an issuance of 300,083,857 common shares, in an effort to bolster liquidity margins and improve its cash position.
After being installed in March 2020, IRB’s new board had identified several indications that suggested that the fiscal year’s opening balances in 2020 were incorrect and should undergo adjustments.
A restatement process was then undertaken and the original financials were adjusted and approved by the board on June 29, after going through the Audit Committee and the Fiscal Council.
The reinsurer believes the completion of this share issuance reinforces its solvency levels and provides an improvement in the regulatory framework levels for the coverage of technical provisions, while providing an additional liquidity margin.
“As we said before, this solution guarantees the company’s future in a balanced way, in the long run, and this first result shows that we made the right choice, now endorsed by the market,” said IRB president Antonio Cassio dos Santos
Approximately 100,000 shareholders of IRB Brasil RE exercised the preemptive right to acquire shares.
Approximately 70% was subscribed by institutional shareholders and 30% by individual shareholders.
This, Santos says, “Shows that the interest came from a scattered base, it is a sign that our brand remains strong after the challenging period that the IRB went through.”
It’s been an eventful year for the reinsurer, having announced in March that it had replaced its President and Chief Financial Officer amid confusion over a possible investment by Berkshire Hathaway. The announcement prompted its shares to fall 32%.