February 16, 2014 / 8:53 PM / 5 years ago

RSA eyes sale of Canadian unit: Sky News

(Reuters) - British insurer RSA (RSA.L) is looking for prospective buyers for the sale of one of its Canadian businesses, which could help the company raise as much as 200 million pounds ($335 million), Sky News reported on Sunday.

A sign of RSA insurance company is pictured outside its office in London December 13, 2013. REUTERS/Toby Melville

RSA has begun the auction of Noraxis Capital Corporation, a network of Canadian regional insurance brokers, the news service said, citing unidentified sources.

RSA spokeswoman said a business review was under way and RSA would announce the outcome on February 27. She declined to comment on the Sky News story.

Sky News said the sale of Roins Financial Services Ltd’s subsidiary had begun before the insurer’s Chief Executive Stephen Hester took over in early February, and that it has his approval.

Hester, ousted from state-backed RBS in June by Britain’s finance ministry, replaced Simon Lee, who resigned a month earlier over allegations of accounting irregularities that left the insurer with a 200 million pound hole in its finances.

Sky News quoted its sources as saying that existing players in the Canadian insurance market would be among those most interested in buying Noraxis. A potential sale was being overseen by Bank of America Merrill Lynch.

Noraxis members include CG&B Group, Renfrew, Ranger, Stevenson & Hunt, Atrens Counsel, Fraser & Hoyt and Bell & Grant.

Sky News also reported a possible sale of the FTSE-100 company’s operations in central and eastern Europe including businesses in Latvia and Poland, which was being handled by investment bank UBS.

RSA had previously said it was considering all options to raise capital that could include the sale of business units.

The Financial Times on Saturday reported that RSA was sounding out institutional investors to raise as much as 350 million pounds ($585.59 million) in a emergency share placing that would allow it to avoid a rights issue.

RSA operates in 31 countries across Europe, Asia, Latin America, Canada and the Middle East.

A senior insurance executive at Hiscox said last week that insurers in flood-hit Britain might raise premiums if storms continue to batter the country in the coming weeks. ($1 = 0.5977 British pounds)

Reporting by Aashika Jain in Bangalore; Editing by Alistair Lyon

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