Australia-based QBE Insurance Group may sell its US underwriting agency businesses and other assets and issue new shares, in a bid to raise $1.5bn after an 18% drop in first-half profit.
The insurer may also create a joint venture structure for two of its Australian agency businesses, following the completion of sale of its other operations in Central and Eastern Europe.
An initial public offering for QBE LMI, a specialist Australian mortgage insurer, would be undertaken in 2015.
According to QBE, it will also undertake an equity raising of about $750m to repurchase and cancel the outstanding $500m of its convertible subordinated debt.
The company will also borrow $700m to replace senior debt.
QBE Insurance Group CEO John Neal said that the planned sales and IPO would benefit the company’s profit growth and return on equity.
"Despite a high level of interest to acquire our North American middle-markets business, we see real value in investing in this business to build on the improved client retention and claims performance we are experiencing in 2014," Neal added.
Image: QBE to raise $1.5bn by issuing new shares and through the sale of its US underwriting agency businesses. Photo: courtesy of adamr/ FreeDigitalPhotos.net.