Hastings plans £180m listing to reduce debt

UK-BASED INSURER Hastings Direct said it plans to raise £180m through a listing on the London Stock Exchange, using the proceeds to reduce debt and strengthen its capital base.

A number of existing shares held by various shareholders will also be sold, the company said in a statement. Hastings is expected to have a freefloat of at least 25 per cent following the listing.

Hastings is expected to have a market value of between £1bn and £1.5bn, according to media reports. A spokeswoman for the company declined to comment on these estimates.

The net proceeds of the sale will allow the group, one of Britain’s fastest growing motor insurers, to strengthen its capital base for future growth and in advance of new Solvency II capital requirements.

“Today’s announcement of our intention to float marks the next stage in Hastings’ growth story,” Gary Hoffman, CEO of Hastings, said.

The company is expected to list in October, following which the company will be eligible for inclusion in FTSE UK indices.

A holding company comprised of Goldman Sachs Merchant Banking division, certain founders and members of management will remain the largest shareholder.

Hastings intends to adopt an annual dividend of between 50 per cent and 60 per cent of group profits after tax, adjusted to exclude the impact of non-amortisation, share scheme costs and other non-recurring items.

Credit Suisse Securities and Goldman Sachs International are leading the sale. Also underwriting the listing are Barclays and HSBC, as well as Stiefel Nicolaus Europe Limited and Peel Hunt LLP.