Montgomery, Ala. based Enstar Group and Bermuda’s Castlewood Holdings Limited jointly announced that Castlewood and Oceania Holdings Ltd, a wholly-owned subsidiary of Castlewood, have entered into a definitive agreement for the purchase of Inter-Ocean Holdings Ltd. for approximately $57 million.
The bulletin explained that “Inter-Ocean owns two reinsurers, one based in Bermuda and one based in Ireland. Both companies wrote international reinsurance and had in place retrocessional policies providing for the full reinsurance of all of the risks they assumed. In April 2005, the board of directors of Inter-Ocean decided to have both companies cease underwriting new business and placed them into run-off (See IJ web site Feb.18, 2005). Castlewood has been providing management services to Inter-Ocean for approximately 11 months.”
The transaction, which is subject to regulatory approvals, is expected to close in the first quarter of 2007. It “is expected to be financed by approximately $24.5 million of new bank debt and available cash on hand,” said the announcement.
The bulletin also notes that Castlewood “acquires and manages insurance and reinsurance companies in run-off and provides management, consultancy and other services to the insurance and reinsurance industry.” Enstar has around a 33 percent stake in Castlewood and 50 percent of the voting rights (See IJ web site Dec. 12, 2005).
The two companies are in the process of merging their interests into a Bermuda Holding Company, which will result in Enstar becoming a wholly- owned subsidiary of Castlewood.
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