AmTrust completes $300m capital raise

New York-based property/casualty holding company AmTrust Financial Services has completed a $300 million capital raise through a private placement to support its insurance units.

The common equity shares were priced at $12.45 per share, according to the statement.

Through the investment, AmTrust wants to enhance its balance sheet and capital base, according to a statement. AmTrust intends to direct the proceeds from the private placement to the company's insurance subsidiaries to support their financial strength, continued organic growth, and writing of business.

The insurer had delayed its 2016 consolidated financial statements and said that the company's 2014 and 2015 financial reports would be restated.

Shareholder rights law firm Robbins Arroyo filed a class action complaint against AmTrust. In the filing, the law firm accuses AmTrust officials of falsely attesting to the accuracy of the financial statements, to the disclosure of any material changes to the company's internal controls over financial reporting, and to the disclosure of all fraud.

AmTrust should take a reserve charge “in the hundreds of millions of dollars” and commit to “much-improved disclosure” in order to restore investor confidence, analysts at Keefe, Bruyette & Woods suggested.

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