Maiden Holdings Announces Sale of U.S. Treaty Reinsurance Renewal Rights to TransRe and Update on Strategic Review
August 29 2018 - 7:01PM
Maiden Holdings, Ltd. (NASDAQ: MHLD) (“Maiden” or the “Company”)
announced today that it has sold the renewal rights in respect of
its U.S. treaty reinsurance underwriting business to Transatlantic
Reinsurance Company (“TransRe”).
The transaction, which has now closed, does not
include any of the Bermuda underwriting elements of Maiden’s
portfolio including its AmTrust Business or its International
Insurance Services and Capital Solutions businesses in Europe,
which forms the significant majority of Maiden’s existing business
and will remain as part of its on-going business.
The Company also reported that in connection
with its previously announced strategic review, it is in advanced
discussions regarding the sale of its wholly-owned subsidiary,
Maiden Reinsurance North America, Inc. (“MRNA”) to a third
party. The transaction would cover approximately $1.1 billion
of loss and LAE reserves as of June 30, 2018. Readers are cautioned
that such discussions may or may not lead to an agreement to sell
MRNA. The Company does not expect to disclose any further
developments unless and until it determines that further disclosure
is appropriate or required.
The completion of the sale of the renewal rights
begins the process of simplifying Maiden’s operations, and along
with anticipated restructuring and related expense reductions, are
expected to improve its business performance and profitability, and
significantly reduces the amount of capital required for Maiden’s
operations.
“The announcement of this transaction represents
an important step in Maiden’s continuing strategic review process
and we believe this transaction will increase our financial
flexibility, improve our operating efficiency and profitability and
broaden our ability to allocate capital to future strategies, which
in turn will create value for our shareholders,” said Lawrence F.
Metz, Maiden’s President and Chief Executive Officer designate.
Metz continued: “We are deeply grateful to the
Maiden team for their continued efforts in this challenging
environment and, prospectively, we will coordinate closely with
clients to ensure a smooth transition.”
About Maiden Holdings,
Ltd.Maiden Holdings, Ltd. is a Bermuda-based holding
company formed in 2007. Through its subsidiaries, which are each A-
rated (excellent) by A.M. Best, the Company is focused on providing
non-catastrophic, customized reinsurance products and services to
small and mid-size insurance companies in the United States and
Europe. As of June 30, 2018, Maiden had $6.7 billion in assets and
shareholders' equity of $1.1 billion.
Forward Looking StatementsThis
release contains "forward-looking statements" which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The forward-looking statements are
based on the Company's current expectations and beliefs concerning
future developments and their potential effects on the Company,
including forward-looking statements with respect to the potential
sale of MRNA, the benefits expected to be derived from the sale of
the renewal rights and the achievement of additional operational
efficiencies and expense reductions. Readers are cautioned that
actual results may differ materially from those projected as a
result of significant risks and uncertainties, including the
ability to negotiate a satisfactory agreement with respect to the
sale of MRNA, delay in achieving improvements (if any) in the
Company’s business results and financial positions, non-receipt of
expected payments, changes in interest rates, effect of the
performance of financial markets on investment income and fair
values of investments, developments of claims and the effect on
loss reserves, accuracy in projecting loss reserves, the impact of
competition and pricing environments, changes in the demand for the
Company's products, the effect of general economic conditions and
unusual frequency of storm activity, adverse state and federal
legislation, regulations and regulatory investigations into
industry practices, developments relating to existing agreements,
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
Item 1A. Risk Factors in the Company's Annual Report on Form 10-K
for the year ended December 31, 2017 as updated in periodic
filings with the SEC. However these factors should not be construed
as exhaustive. Forward-looking statements speak only as of the date
they are made and the Company undertakes no obligation to update or
revise any forward-looking statement that may be made from time to
time, whether as a result of new information, future developments
or otherwise, except as required by law.
CONTACT:Bill Horning, Senior Vice President,
Investor RelationsMaiden Holdings, Ltd.Phone: 856.359.2532E-mail:
bhorning@maiden.bm
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