- Insurance Australia Group (IAG) has successfully completed a fully underwritten institutional placement and raised $650 million
- The company entered a trading halt on November 19 after a ruling from the NSW Supreme Court of Appeal indicated that it must pay out COVID-19 losses
- Despite stating it will most likely appeal this decision, IAG intends to fund a post-tax provision of $865 million with a $650 million placement and $100 million share purchase plan
- Under the placement, 128.7 million new fully-paid ordinary shares will be issued to domestic and offshore institutional investors at $5.05
- Shares are expected to settle on November 25 and be issued and begin trading on the ASX on November 26
- IAG has ended the day 6.04 per cent in the red with shares trading for $5.13
Insurance Australia Group (IAG) has successfully completed a fully underwritten institutional placement and raised $650 million.
The company entered a trading halt on November 19 after a ruling from the NSW Supreme Court of Appeal indicated that it must pay out COVID-19 losses.
Other companies such as QBE and Suncorp must also pay despite insisting that pandemic costs should not be covered.
The court determined that COVID-19 is not a quarantinable disease (human diseases covered by the Quarantine Act 1908), leaving insurers unable to reject these claims.
A day later, IAG announced it is aiming to raise $750 million to prepare for the onslaught of claims it could potentially receive.
Despite stating it will most likely appeal the decision with the High Court of Australia, IAG intends to fund a post-tax provision of $865 million with a $650 million placement and $100 million share purchase plan.
Under the placement, 128.7 million new fully-paid ordinary shares will be issued to domestic and offshore institutional investors at $5.05.
Shareholders who bid for an amount less than or equal to their pro rata shares were allocated their full bid.
Shares are expected to settle on November 25 and be issued and begin trading on the ASX on November 26.
Under the share purchase plan, eligible will have the opportunity to apply for up to $30,000 worth of shares without incurring any brokerage or transaction costs.
While an exact price hasn’t been announced, shares will be priced lower than the placement and have a two per cent discount to the five-day volume-weighted average price.
IAG may accept applications totalling more or less than $100 million.
The SPP will open on November 30 and close on December 18. Shares will be issued on December 31 and begin trading on the ASX on January 4.
IAG has ended the day 6.04 per cent in the red with shares trading for $5.13 in a $12.61 billion market cap.