Delta Lloyd sets out terms of €650m rights issue

Dutch insurer Delta Lloyd has set out the terms for its €650m rights issue, in a bid to improve its capital position in line with Solvency II.

The rights issue has been controversial among shareholders, with US fund manager Highfields, which holds a 14% share, took Delta Lloyd to court at the beginning of March.

Prior to that, the group had already reduced the scale of the issue, which was initially proposed to amount to €1bn.

However, with the backing of Dutch central bank and regulator DNB, Delta Lloyd won the case at the Enterprise Court of Amsterdam and narrowly gained shareholder approval for the €650m issue last week.

According to the terms set out today, Delta Lloyd is set to issue  227.567,943 new ordinary shares at a subscription price of €2.85 per new ordinary share, leading to approximately €648.6m in gross proceeds, the rump offering is expected to take place on 7 and 8 April.

With the additional income from the rights issue, the insurer hopes to expand its capital ratio to by 25% to a total of 150%, in line with Solvency II requirements.

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