Shares in RSA have climbed 3.8% to 99.5p since share issuance details emerged

RSA shares peaked at 99.5p this morning after reports of rumoured fund raising activity, a 3.8% increase on Friday’s closing price of 95.85p.

The price spike comes after The Financial Times reported that the insurer is set to raise up to £350m in an emergency sale of discounted shares to existing shareholders, a move intended to avoid a rights issue.

RSA’s new chief executive Stephen Hestor told The Financial Times he has approached top institutional investors to win interest for a “quick and easy route” to a placing, which could raise as much as 10% of the company’s equity.

RSA is looking to improve its capital base after accounting and reserving issues in the company’s Irish operation revealed a large hole in its balance sheet. As much as £200m is expected to be wiped from its 2013 profits, putting RSA’s financial ratings at risk of downgrade