United Kingdom insurer Hastings eyes London listing with $278 mln share sale

United Kingdom insurer Hastings Direct said on Tuesday it plans to raise 180 million pounds ($277.40 million) through a listing on the London Stock Exchange, using the proceeds to reduce debt and strengthen its capital base.

Some of Hastings’ 2,000 employees are also small shareholders in the business and are in line for a windfall after the company goes public.

The company has a 5.5% share of the United Kingdom private vehicle insurance market and 1.9mln live customer policies.

Following the IPO Goldman Sachs will remain Hastings’ largest shareholder.

Hastings’ equity-raising is expected to be accompanied by the refinancing of a £420m bond issued by the company in 2013. Gary Hoffman, Hastings chief executive, told City A.M.in April this year that the firm was “working with the shareholders to review options for the future”, but was “in no rush” to float.

The auto insurance industry has suffered of late, with earnings driven down by higher claims costs and pricing weakness as competition has multiplied, but recent results have been mainly more reassuring.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007, which heralded Britain’s banking crisis.

Goldman Sachs, the U.S. investment bank, is advising on the float and owns half of the company, having spent GBP150.0 million on acquiring the stake at the start of 2014. A spokeswoman for the company declined to comment on these estimates. Also underwriting the listing are Barclays [BARCR.UL] and HSBC, as well as Stiefel Nicolaus Europe Limited and Peel Hunt LLP.