Reliance Group Reports $546 Million Loss for Third Quarter

Reliance Group Holdings reported a net loss of $546.5 million, or $4.76 per diluted share, for the third quarter, including an after-tax charge of $215.8 million for increasing net loss reserves by $332 million pretax. It also includes an after-tax restructuring charge of $18.1 million resulting from continued consolidation, and a charge of $186.3 million for an increase in the company’s deferred tax valuation allowance.

In the third quarter of 1999, Reliance Group had a net loss of $15.1 million, with $582.9 million in revenues. The reduction in revenues resulted from the company’s previously announced decision to run-off its insurance operations.

As of Sept. 30, 2000, the company had $711.4 million in outstanding debt, including $237.5 million in bank borrowings with a maturity date of Nov.10, 2000 (those loans have been extended indefinitely) and $291.7 million in senior notes due November 15, 2000 (including $7.5 million held by Reliance Insurance Company). The company does not have sufficient cash resources to meet these obligations, and is in discussions with its creditors and insurance regulators.

Topics Profit Loss