RSA Insurance Group (now Limited, from Plc previously) has secured approval from its shareholders to reduce capital following Monday’s general meeting in London.
Among the duly passed special resolutions was that the company’s existing share capital be reduced from £2,069,394,887 to £1,269,394,887 by cancelling and extinguishing 800 million ordinary shares of £1 each. The level of reduction is credited to RSA’s reserves.
In chair Mark Hodges’s letter to shareholders prior to the general meeting, he noted: “As disclosed in the scheme document relating to the acquisition, Intact and the company now plan to undertake a reorganisation of the RSA group structure. The reorganisation involves moving RSA’s Canadian companies to sit alongside Intact’s Canadian companies in the group structure and the unwind of an internal loan note that had to be created to facilitate the sale of RSA’s Scandinavian business to Tryg, which took place on completion of the acquisition.
“In order to do this, the company needs to increase its distributable reserves, and the company is proposing to undertake a reduction of capital to achieve this. The reduction of capital requires shareholder approval and for that reason the company is convening a general meeting.”
The effective date of the now approved capital reduction is slated to occur on or around June 23.
Meanwhile Hodges also offered assurances to RSA preference shareholders.
“I would like to reassure preference shareholders of the company that the proposed reduction of capital will not affect any of the rights attaching to your preference shares, nor will there be any change to the number or nominal value of the preference shares in issue,” said the new chair. “Neither the company nor Intact have any current intention to make any changes to the terms and conditions of the preference shares or to take any action in respect of the preference shares in issue.
“The company now forms part of the wider Intact group, which is listed on the Canadian Stock Exchange at a market capitalisation of over £20 billion. The reduction of capital will therefore not affect the company’s ability to meet its financial commitments.”