Royal &SunAlliance (R&SA) hopes to swell its coffers by up to A$2.1bn (£805m)by floating its Australasian subsidiary Promina.

The sale is seen as a crucial part of R&SA 's capital raising plans to ensure its survival. Promina intends to float on 12 May despite weak demand for equities and market worries about Iraq.

Its valuation is based on a prospectus issued last week which priced its 1.057 billion shares at between A$1.5 to A$2 each for institutional investors. Retail investors would get a 10%discount.

Promina chief executive Michael Wilkins said he did not expect R&SA to keep any Promina shares after the IPO. He forecast strong investor interest due to a dividend yield of between 5%and 6.8%.

Promina 's net profit for 2003 is forecast at A$188m (£72m),against a 2002 loss of A$291m (£112m),and a A$100m (£38m)boost to asbestos claims reserves.