IRB Brasil RE approves capital raise of up to 2.3 bln reais

RIO DE JANEIRO, July 9 (Reuters) - IRB Brasil Resseguros on Thursday said its board had approved a capital increase of up to 2.3 billion reais with the issuance of common shares for private subscription at a price of 6.93 reais per share.

The value represents a discount of 25.6% to the closing price of the shares on Wednesday. The shares have fallen 76% in 2020, the worst performance among the securities listed on the Bovespa stock index.

The reinsurer, which has been struggling after admitting to accounting irregularities, said the proceeds would help the company meet regulatory liquidity ratio and loss coverage.

They would also strengthen the company’s capital structure and increase its solvency, which would allow the implementation of other business strategies for the coming years, it said.

Bradesco Seguros and Itaú Seguros would be anchors for the subscription, with approximately 15.4% and 11.3% respectively, with a contribution of at least 355 million and 259.7 million reais, it said. (Editing by Gabriel Stargardter and Alex Richardson)