(Adds measures, placement details, share performance)
April 14 (Reuters) - Australia's QBE Insurance Group Ltd QBE.AX said on Tuesday it aimed to raise about $825 million to weather the economic damage the coronavirus pandemic is unleashing.
Australia's second-largest insurer by market capitalisation after Insurance Australia Group IAG.AX joins a growing list of companies seeking to bolster reserves, as the outbreak forces most business sectors to a near standstill with no clarity as to when the crisis may subside. pre-emptive capital raise comes after a strong first quarter for the insurer where it saw gross written premiums rise 9% to $4.53 billion.
Still, QBE said it has unloaded all equity it held as well as emerging market and high-yield debt, and has done more corn price hedging to defend against weak oil prices.
Pat Regan, QBE's chief executive officer, said the measures are necessary in the "extraordinarily difficult landscape".
The capital raise is split through a $750 million institutional placement and further $75 million through a share purchase plan.
"The capital plan we have outlined positions us to navigate this period of extreme uncertainty with demonstrable strength and gives us the flexibility to pursue organic growth opportunities that may arise over the medium term," Regan said.
The placement to institutional investors will be at a price of A$8.25 a share, which is a 9.4% discount to QBE's last closing price of A$9.11 on April 9. It will issue 145.5 million new shares.
Shares of QBE fell nearly 37% in March, the stock's worst month in nearly two decades.
QBE also said the capital raise would lift the insurer's capital to above Standard & Poor's "AA" credit-rating level.
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