Tawa PLC Disposal (9204M)
September 24 2012 - 2:01AM
UK Regulatory
TIDMTAW
RNS Number : 9204M
Tawa PLC
24 September 2012
London, 24 September 2012
TAWA PLC ("TAWA")
PRESS RELEASE- RNS
Tawa announces sale of KX Reinsurance Company Limited and
OX Reinsurance Company Limited
Tawa plc ("Tawa"), the quoted specialised investor in the
insurance industry, today announces that it has signed a Share
Purchase Agreement to sell 100% of its shares in KX Reinsurance
Company Limited ("KX Re") to Catalina Holdings Limited. The sale
includes 100% of the shares in OX Reinsurance Company Limited ("OX
Re"), which is wholly owned by KX Re. This disposal is in line with
the stated strategy of divesting some of its portfolios as set out
at its AGM on 21 June 2012. The formal sales process of the entire
Tawa plc stock announced on 10 September 2012 is continuing as
anticipated.
The total consideration to be received at completion will be a
minimum of $28 million in cash and could reach $30 million,
depending on financial performance of KX Re between now and
completion. $15 million of this will be used to repay an
inter-company loan facility between KX Re and Tawa plc on
completion. The balance of the consideration received will be used
for financing new opportunities, the repayment of debt and general
working capital purposes. The net book value of KX Re as at 31
December 2011 was $53.1 million. The impact of the sale on the
consolidated Tawa plc balance sheet prepared under International
Financial Reporting Standards at completion is estimated to be a
reduction in equity of $19 million (assuming total consideration of
$30 million is received).
Tawa acquired KX Re in May 2007 and OX Re in March 2011. The
total value extracted from the investments in KX Re and OX Re,
including the proceeds from the sales, is estimated to be $126
million compared to a cash outlay of $78 million in aggregate. For
the year ended 31 December 2011 Tawa received management fees from
KX Re of $2 million.
Completion of the transaction is subject to certain conditions
including receiving FSA approval to the change of control, which is
expected to be received by the end of 2012, and discharge of OX
Re's routine business banking charges which is expected in advance
of such date.
KPMG acted as the financial adviser to Tawa plc on the
transaction.
ENDS
Enquiries:
Gilles Erulin 020 7068 8044
============================================ ==============
Chief Executive, Tawa plc
============================================ ==============
Peel Hunt LLP (nominated adviser & broker)
============================================ ==============
James Britton
Guy Wiehahn 020 7418 8900
============================================ ==============
FWD PR
============================================ ==============
Victoria Sisson
Alexandra Thompson 020 7623 2368
============================================ ==============
Notes for Editors:
About Tawa Plc
Tawa plc was formed in 2001 and is a specialised investor in the
insurance industry. In the last few years, Tawa has moved from
being a pure run-off risk owner towards being a multi-segment
investor in the insurance market, expanding significantly in the
servicing arena of the insurance industry.
Tawa invests in acquiring run-off portfolios ("Portfolios",
"Risk Carriers") and investing in servicing business. The Group
also operates as an incubator for new projects and has invested
alongside professional teams to create two new businesses, Q360 and
Lodestar Marine, in addition to developing its own products to
serve the insurance market as a whole such as STRIPE(R) .
On the portfolio front, Tawa has acquired, since its formation,
six insurance entities in run-off - CX Reinsurance Company Limited,
KX Reinsurance Company Limited, LGIC Holdings, LLC, PXRE
Reinsurance Company, Island Capital Limited and OX Reinsurance
Company Limited. As an alternative technique to assuming run-off
risks, Tawa has also established a dedicated reinsurance vehicle in
Bermuda to reinsure portfolios. On the service side, Tawa acquired
Pro Insurance Solutions Ltd (Pro) in 2009 and the HIR group in
April 2012. HIR owns the Chiltington Consulting Group. Through HIR,
Tawa now offers a vehicle for European run-off portfolio transfers
under the European Union portfolio transfer directive.
The Group's combined team of approximately 400 professionals
service a number of the largest insurance businesses in the UK and
Europe and deliver a market-wide third-party servicing capability
and cover London's company and Lloyd's markets as well as Europe,
Bermuda, South America and the USA. The service companies provide
underwriting, claims management, broking and consulting services to
a broad array of international clients across the market, whether
active underwriters or run-off. Pro has also established an
innovative platform to provide turnkey services supporting clients
wishing for immediate start of a new broking or MGA venture.
As part of its expansion in the Lloyd's market, in January 2012,
Tawa became the owner of 33% of Asta Capital Limited, the leading
turnkey agency management services company in Lloyd's.
In July 2007 Tawa plc was floated on the AIM market.
Further information can be found on the Company's website:
www.tawaplc.co.uk.
Tawa plc is listed on the AIM market.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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