R&Q Insurance faces possible provisional liquidation

All options being explored and evaluated by the board

R&Q Insurance faces possible provisional liquidation

Mergers & Acquisitions

By Terry Gangcuangco

R&Q Insurance Holdings is facing substantial challenges as the insurance company struggles to get the proposed sale of its program management business Accredited across the finish line.

In an update, R&Q noted: “The period of intensive discussion 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 (either on its own behalf or on behalf of or due to the requirements of other stakeholders).

“In addition, as announced on December 22, 2023, the company has been constrained since that time in relation to its ability to consummate external legacy transactions. These factors, as well as further adverse reserve development and a degree of general stress to the company’s businesses during this period, have had a material impact on the company’s stability as a business and as a going concern.”

With both camps keen to finalize the pending 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 sale conditions are not met.

R&Q stated: “The board is currently exploring and evaluating all options that may be available to the company, including alternative transactions (including the alternative proposal) and potential sources of liquidity, while continuing to work to complete the original sale.

“Shareholders should note that the implementation of the alternative proposal would involve the parent company, R&Q Insurance Holdings Ltd., filing for a provisional liquidation in Bermuda and then completing the sale of Accredited to Onex through that process. The provisional liquidators would then look to realize value from the group’s remaining assets.”

In the event of provisional liquidation, R&Q will request an immediate suspension of trading in its ordinary shares. It was pointed out that if the transaction does not proceed on its original terms and net cash proceeds are not available to facilitate a financial de-leveraging of R&Q, the company will not be able to repay its debt facilities as they become due and would therefore be unable to continue as a going concern.

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