AmTrust Financial Services, Inc. to Receive Proceeds of $300 million of Common Equity Capital From Private Placement
May 25 2017 - 5:30PM
Capital Contribution to Further Enhance Balance
Sheet and Capital BaseProceeds to Be Put Directly into Insurance
Operations to Support Organic Growth Opportunities
AmTrust Financial Services, Inc. (Nasdaq:AFSI)
(the “Company” or “AmTrust”) announced today that
it will issue common equity to raise gross proceeds of US$300
million through a private placement (“Private Placement”). The
common equity shares were priced at $12.45 per share. AmTrust’s
common stock closing market price on the Nasdaq Stock Market on
Thursday, May 25, 2017 was $12.45 per share. The investment will
further enhance AmTrust’s balance sheet and capital base. AmTrust
intends to direct the proceeds from the Private Placement to the
Company’s insurance subsidiaries to support their financial
strength, continued organic growth, and writing of business. The
transaction is expected to close on May 26, 2017.
Members of the Karfunkel family are the sole
participants in the Private Placement. The purchasers will receive
unregistered common shares in AmTrust, as well as certain rights to
register the shares at a future date. Additionally, the purchasers
have agreed not to transfer the common stock, subject to certain
limited exceptions for bona fide estate planning purposes, for a
period of one-year from purchase and will not exercise their right
to vote their shares of common stock until after the conclusion of
the Company’s 2018 annual meeting of shareholders.
“Members of the Karfunkel family chose to make
this investment because they believe strongly in the Company’s
future,” said Barry Zyskind, Chairman and Chief Executive Officer,
AmTrust. “Since its founding in 1998, AmTrust has grown from an
entrepreneurial start-up into one of the largest specialty property
and casualty insurers in the U.S., with an expanding global
presence. The capital contribution gives AmTrust a higher capital
base to support our business platform and organic growth
opportunities. In addition to enhancing our balance sheet and
capital base, this sizeable investment of $300 million should also
provide confidence to all of our stakeholders that we are well
capitalized to grow and write business. We remain committed to
continuing to support growth and maintain confidence in
AmTrust.”
The members of the Company's independent audit
committee, with the assistance of its outside legal and financial
advisors reviewed terms of the Private Placement on behalf of the
Company.
About AmTrust Financial Services,
Inc.
AmTrust Financial Services, Inc., a
multinational insurance holding company headquartered in New York
City, offers specialty property and casualty insurance products,
including workers' compensation, commercial automobile, general
liability and extended service and warranty coverage through its
primary insurance subsidiaries rated "A" (Excellent) by A.M. Best.
For more information about AmTrust visit www.amtrustgroup.com.
Forward-Looking Statements
This news release contains certain
forward-looking statements that are intended to be covered by the
safe harbors created by the Private Securities Litigation Reform
Act of 1995. When we use words such as “anticipate,” “intend,”
“plan,” “believe,” “estimate,” “expect,” or similar expressions, we
do so to identify forward-looking statements. Examples of
forward-looking statements include the plans and objectives of
management for future operations, including those relating to
future growth of our business activities and availability of funds,
projections of the impact of potential errors or misstatements in
our financial statements, and estimates of the impact of material
weaknesses in our internal control over financial reporting, and
are based on current expectations that involve assumptions that are
difficult or impossible to predict accurately and many of which are
beyond our control. Actual results may differ materially from those
expressed or implied in these statements as a result of significant
risks and uncertainties, including, but not limited to, non-receipt
of expected payments from insureds or reinsurers, changes in
interest rates, a downgrade in the financial strength ratings of
our insurance subsidiaries, the effect of the performance of
financial markets on our investment portfolio, the amounts, timing
and prices of any share repurchases made by us under our share
repurchase program, development of claims and the effect on loss
reserves, accuracy in projecting loss reserves, the cost and
availability of reinsurance coverage, the effects of emerging claim
and coverage issues, changes in the demand for our products, our
degree of success in integrating acquired businesses, the effect of
general economic conditions, state and federal legislation,
regulations and regulatory investigations into industry practices,
the impact of known or potential errors or misstatements in our
financial statements, our ability to timely and effectively
remediate the material weaknesses in our internal control over
financial reporting and implement effective internal control over
financial reporting and disclosure controls and procedures in the
future, risks associated with conducting business outside the
United States, the impact of Brexit, developments relating to
existing agreements, disruptions to our business relationships with
Maiden Holdings, Ltd. or National General Holdings Corp., breaches
in data security or other disruptions with our technology,
heightened competition, changes in pricing environments, and
changes in asset valuations. Additional information about these
risks and uncertainties, as well as others that may cause actual
results to differ materially from those projected, is contained in
our filings with the SEC, including our Annual Report on Form 10-K
and our quarterly reports on Form 10-Q. The projections and
statements in this news release speak only as of the date of this
release and we undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
For more information, please contact:
AmTrust Financial Services, Inc.
Chaya Cooperberg
Chief Communications Officer & SVP Corporate Affairs
chaya.cooperberg@amtrustgroup.com
646.458.3332
Amtrust Financial Services, Inc. (delisted) (NASDAQ:AFSI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amtrust Financial Services, Inc. (delisted) (NASDAQ:AFSI)
Historical Stock Chart
From Apr 2023 to Apr 2024