R&Q awash in owner support, ups capital increase by 25%
Global specialty insurer Randall & Quilter (R&Q) was inundated with bids for new shares from existing owners on the first day of book building and moved quickly to increase the rescue issue by about 25%.
Book building opened Monday (June 13) for round one of a multi-stage rescue funding deal initially designed to bring in $100 million to meet Lloyd's obligations and shore up the balance sheet. That target has now been raised to $125 million.
The extra funds will additionally be put to paying down debt, R&Q said in its market filing.
R&Q further managed to clear the atmosphere by settling a lingering conflict with its estranged white knight investor Brickell PC Insurance Holdings over their failed investment deal. Neither side admits liability, but R&Q will pay $1.25 million in costs.
That settlement should allow R&Q to proceed a bit more slowly on the fundraising campaign. A revised schedule is expected.
The Monday book building, pre-priced at 105p per share, will lead to firm placement of up to 10% of capital already authorised for issuance. R&Q also has a smallish $8 million open tranche, a $1.4 million slice for management and is planning an EGM to authorise the remainder.
From the raised funds, R&Q intends to put approximately $60 million to fund collateral requirements at Lloyd's, then put the rest to pay down debt and meet financial covenants. R&Q is under the gun to put $30 million into its Lloyd's reserve by June 21, then the other half by August.
The new issuance will go head-to-head against a major stake sale by the departing Brickell PC Insurance Holdings and 777 Partners, set for sale June 20.
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