R&Q Insurance faces possible provisional liquidation | Insurance business America
All options are examined and evaluated by the board
Mergers & Acquisitions
By Terry Gangcuangco
R&Q Insurance Holdings is facing significant challenges as the insurance company struggles to get the planned sale of its Accredited program management business across the finish line.
In an update, R&Q noted: “The period of intensive discussions with its lenders, regulators and other stakeholders (both before and after the signing of the lock-up agreement) has resulted in the company incurring significant additional unexpected costs and expenses (both on your own behalf or on behalf of or based on the requirements of other stakeholders).
“In addition, as announced on December 22, 2023, the Company has been limited in its ability to complete external legacy transactions since that date. These factors, together with the continued adverse development of reserves and some general stress on the Company’s operations during this period, had a significant impact on the stability of the Company as a business and as a going concern.”
With both camps keen to complete the upcoming deal, R&Q revealed that recent discussions with Accredited’s buyer resulted in Onex Corporation offering an alternative transaction structure or proposal that could be implemented if the original terms of sale fail would be fulfilled.
R&Q said: “The board is currently reviewing and evaluating all options that may be available to the company, including alternative transactions (including the alternative proposal) and potential sources of liquidity, as it continues to work towards completing the initial sale.”
“Shareholders should note that implementation of the alternative proposal would mean that the parent company, R&Q Insurance Holdings Ltd., would apply for provisional liquidation in Bermuda and then complete the sale of Accredited to Onex through that process.” The provisional liquidators would then seek to achieve value from the group’s remaining assets.”
In the event of a provisional liquidation, R&Q will request an immediate suspension of trading in its common shares. It was noted that the Company is unable to repay its credit facilities as they become due and therefore will not be able to repay its credit facilities as they become due if the transaction does not proceed on the original terms and there are no net cash proceeds available for financial deleveraging of R&Q will not be able to continue operations.
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2024-06-14 05:40:00
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