SCOR PLANS 400M EURO CAPITAL INCREASE

French reinsurer SCOR is planning a 400m euro equity issue to “reinforce [its] strong financial base at a time when recovery in the reinsurance cycle is being confirmed”, chairman and chief executive Jacques Blondeau announced yesterday. The move follows the collapse only last week of its talks with Germany’s Gerling to buy the group’s troubled Gerling Global Re unit — with the failure of its bid understood to have reflected its difficulties in raising the 750m euro it needed for the acquisition. Analysts have also speculated that the reinsurer was forced into that U-turn by credit ratings agencies that may have warned that it risked losing its top rating. In announcing the share issue, Mr Blondeau said that the latest move would allow the reinsurer to take advantage of hardening market rates by enabling the group to offer its clients additional underwriting capacity for the 2003 renewal season. SCOR only recently reported a first-half profit, after seeing a loss in 2001 reflecting its exposure to the September 11 attacks on the US. It is to call an extraordinary general meeting of shareholders on November 5 to agree the share issue, on which it will offer preferential subscription rights to existing shareholders. If all goes to plan, the issue is expected to be completed by end-December, with French mutual insurer Groupama — which owns 17.4% of SCOR — already coming out in favour of the planned capital boost.