Buffett throws $2.59 bn lifeline to Swiss Re

Legendary American investor Warren Buffett will be investing three billion Swiss francs (about $2.59 billion) in Swiss Re, as the entity reels under global credit crisis.

The news of Buffett's planned cash injection in the leading reinsurer came as Swiss Re today said it expects to post a whopping net loss of one billion Swiss franc for the full year 2008.

Just two days ago, the billionaire investor, who is well known for investments in the insurance sector, had proposed to pump in 300 million dollars through his Berkshire Hathaway, into motorbike manufacturer Harley-Davidson.

Noting that it expects to report a net loss of about one billion Swiss franc for 2008, the company said that it is taking significant measures to reinforce the capital strength.

"In addition to ongoing de-risking in its investment portfolio, the group is raising three billion Swiss franc of capital from Berkshire Hathaway Inc, subject to shareholder approval," the firm said in a statement today.

Berkshire Hathaway already has a three per cent stake in Swiss Re. The planned cash injection to the tune of three billion Swiss franc would be through "a convertible perpetual capital instrument".