Zurich Insurance Group Ltd. said it is seeking shareholder approval to raise capital but is not planning to issue shares at this point, Reuters reported March 27, citing a spokesman.
The statement follows a published report in Italian daily Il Sole 24 Ore saying that Zurich could offer new shares worth up to 20% of its current market capitalization, according to the newswire.
"The proposed change to the authorized and contingent capital is an overall and comprehensive proposal to provide the board with more flexibility with regard to capital raising," the spokesman said. However, he said that the board did not have any specific deals in mind, adding that the company does not need to pursue M&A to deliver on its financial targets, the report noted.
According to the agenda for Zurich's March 29 annual general meeting, the board wishes to increase the insurer's financing flexibility to be able to raise capital to fund growth projects and manage the group's solvency position in times of extreme stress events in the future.
The board will propose to extend its authorization to increase the share capital, at the latest on March 29, 2019, by issuing up to 45 million shares, from the current authorization of up to 10 million shares by March 30, 2018.
In addition, the Swiss insurer's board will propose to increase the contingent share capital by up to 30 million fully paid registered shares, from the existing 10 million fully paid registered shares.