Merging reinsurers stop potential litigation

Merging reinsurers stop potential litigation | Insurance Business Asia

Merging reinsurers stop potential litigation

The four institutional investors holding Series B preference shares in Sirius International Insurance Group aren’t going anywhere, even when the multi-line insurer and reinsurer becomes SiriusPoint Ltd as a result of merging with specialty reinsurer Third Point Reinsurance Ltd.

In a release, Third Point Re announced having reached a definitive agreement with the cornerstone investors who will stay put and convert their existing Sirius Series B preference shares into up to US$260 million (around SG$355 million) face value of newly issued Series B preference shares of SiriusPoint.

The shareholders are Bain Capital Special Situations Asia, L.P.; CCOF Master, L.P.; Centerbridge Credit Partners Master, LP and Centerbridge Special Credit Partners III, LP; and GPC Partners Investments (Canis) LP.

“The new preference shares will be perpetual in nature, carry an 8.00% annual cumulative cash dividend, and will be callable by SiriusPoint on each fifth anniversary of the closing of the merger or upon certain other events,” noted Third Point Re.

“At the time of issuance upon the closing of the merger, SiriusPoint will have the option to substitute up to US$60 million in cash in lieu of an equal face amount of the new preferred stock (or pay in cash the agreed new preference shares face amount of US$260 million in full).”

Additionally, the investors have agreed to toll certain potential claims they may have against Sirius from the date of the definitive agreement with Third Point Re until the closing of the merger or the earlier termination of the agreement, as well as releasing such potential claims upon merger completion. 

Commenting on the development, Third Point Re chair and incoming SiriusPoint chief executive Sid Sankaran stated: “Reaching an agreement with the cornerstone investors is an important milestone for SiriusPoint.

“This agreement provides us with certainty regarding our capital position going forward, resolves amicably a potential litigation, and constitutes an important endorsement of SiriusPoint by sophisticated investors.”

Sankaran added that having the “impressive” investors roster further reinforces the combined entity’s strong balance sheet as SiriusPoint supports clients and broker partners in the upcoming renewal season.