Scor SA, France's biggest reinsurer, plans to raise 600 million euros ($687 million) selling shares to existing investors after scrapping a plan to shed part of its life reinsurance unit. The stock fell 23 percent.

In the meantime, talks are continuing on the sale of Scor's troubled Bermuda-based subsidiary, Commercial Risk.

"The capital increase is aimed at enabling Scor to pursue its strategy to be a middle-sized reinsurer with a global reach," Chief Executive Officer Denis Kessler said at a press conference. Scor already raised 381 million euros selling shares last December.

The reinsurer is struggling to stem losses, boost reserves and bolster its credit ratings. Paris-based Scor today reported a 349 million-euro loss for the first nine months of 2003 as it took provisions for U.S. worker-compensation contracts written between 1997 and 2001. Reinsurers help insurers such as Axa SA spread the risks they assume for clients.

"The reserve strengthening is an alarming repeat of the actions taken a year ago by new management, which with hindsight have proven to be totally inadequate," Richard Hewitt and Jason Kalamboussis, analysts with Dresdner Kleinwort Wasserstein, wrote in a note to investors.

The shares of Scor fell 1.19 euros to 4.01 euros in Paris, valuing the company at about 548 million euros. Volume was about 20 times the daily average in the past 12 months.

Bids Too Low

Scor decided to keep all of its profitable life reinsurance unit. The company, which had hired BNP Paribas SA and Goldman Sachs Group Inc. to find a buyer for at least 49 percent of the unit, said the bids it received were too low.

Kessler, a former senior executive vice president at Axa, Europe's No. 2 insurer, took over a year ago after the company ousted Jacques Blondeau because of concern over management controls. His first move was to raise capital in December, after Scor lost 425 million euros in first nine months of 2002.

For the new offering, shareholders such as Groupama SA have agreed to buy the stock they're entitled to, the company said. Groupama, which owns 18.8 percent of Scor, agreed to buy additional shares amounting to half its current stake if necessary.

BNP Paribas and Goldman Sachs will back the rest of the sale, buying any shares that aren't taken up. Kessler, who declined to elaborate on the details of the capital increase, said he expects it will take place by year-end.

"Today's news is a bad surprise with bad timing in a plagued sector -- but it can't get any worse," said Jacques-Antoine Bretteil, who helps manage $700 million euros at International Capital Gestion in Paris. Bretteil bought Scor shares today.

"It's a lottery ticket I am willing to buy since the sale is backed and I trust the management," he added.

Standard & Poor's lowered Scor's financial strength rating three steps to BBB+ since September of last year, citing concern over earnings and capital reserves. Rating company Fitch has cut the company's financial strength rating five steps. It put the BBB rating on watch for a possible downgrade today.

The company has been in talks with an unidentified buyer for unprofitable Bermuda-based unit Commercial Risk Partners since March, and extended talks on the sale for a second time in August. The unit has stopped writing new business, and talks are continuing on ways to cut CRP's portfolio, Kessler said.