Swiss Life seeks cash injection
Switzerland's largest life insurer, Swiss Life, has confirmed that it is looking to raise an extra SFr900 million ($594 million) to SFr1.2 billion through a rights issue.
Shares in the company fell 12 per cent to SFr160 by the end of trading on Monday.
Responding to weekend media reports, Swiss Life issued a statement in which it confirmed plans for a capital increase and stated that it planned to hold a meeting for shareholders on 23 October.
The Zurich-based company added that further details would be given when it issues its 2002 half-year results on Wednesday.
Heavy discount
Analysts said that a capital increase was likely to come at a steep discount, adding further pressure to shares in a sector already weighed down by larger rival Zurich Financial Services’ plans to issue new shares worth up to SFr3.8 billion.
“After Zurich, Legal & General and Aegon, this is now the fourth big insurer which is looking for cash from investors,” said a dealer quoted by Reuters. “And that is at a time which is hardly ideal for capital increases.”
The announcement follows a tough year for Switzerland’s oldest insurer, in which shares fell by more than 80 per cent amid concern from investors about insurance companies’ exposure to weak equity markets.
Tough year
In May, the company sold off its stakes in two of its non-core businesses, raising SFr554 million in much-needed extra cash.
Swiss Life has been undergoing a review of its operations and strategy since the appointment of the Belgian, Roland Chlapowski, as CEO.
Earlier in the year, the insurer, which employs 12, 700 people in more than 50 countries, announced measures to bolster strength, including 800 job cuts worldwide and an accelerated efficiency drive.
swissinfo with agencies
Established 28 September 1857, by Conrad Widmer in Zurich – Switzerland’s oldest private life insurance company.
The company is No.1 in Switzerland and one of Europe’s leading life insurers.
It has over 12,700 employees worldwide.
Swiss Life has subsidiaries, branches, representative offices and partners representing its interests in about 50 different countries.
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