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Hartford to Sell Stock, Take Treasury Funds

Joseph Woelfel

Hartford Financial (HIG Quote) plans to sell up to $750 million stock and said it will participate in the U.S. Treasury's Capital Purchase Program.

In a statement, the insurer said it received notice of preliminary approval to participate in the government program last month and is eligible for about $3.4 billion.

Hartford plans to use proceeds from the stock sales for general corporate purchases, including possibly buying back debt.

"With our strategic review complete, we are continuing to take actions to build shareholder value," said Ramani Ayer, Hartford's chairman and CEO.

It was reported last week that Ayer would retire by the end of the year and that a search for a successor had begun.

An analyst downgraded the stock on Tuesday because of the apparent "management vacuum" that would be created by Ayer's departure.

The insurer posted a first-quarter loss of $1.2 billion and has cut its dividend and suspended sales of annuities in certain countries in an effort to preserve its capital, reduce risk and stabilize its ratings.