31st Mar 2008 09:09
Tawa PLC31 March 2008 Tawa plc Update on acquisition of PXRE Reinsurance Company and Placing Tawa plc ("Tawa" or "the Company") the UK-listed non life run-off consolidator,announces that it has received regulatory approval to acquire PXRE ReinsuranceCompany ("PXRE") a subsidiary of Argo Group International Holdings, Ltd ("ArgoGroup") (Nasdaq GS: AGII) from the Connecticut Department of Insurance. Theacquisition is expected to complete later today. In order to finance the acquisition in the ratio of approximately 50% debt andexisting cash resources and 50% equity, 11,096,147 new ordinary shares of 10pence each (the "New Shares") have been placed with Karrick Limited at a priceof 130 pence each raising approximately £14.4m. Following the placing FinancierePinault SCA will be diluted to 71.2% of Tawa, which is in accordance with thestated strategy of Financiere Pinault at the time of the IPO. Karrick is a Guernsey-registered company and is wholly-owned by Karrick Trustestablished for various members of the Lakshmi Mittal family. Karrick, aninvestment company, is a long-term value and growth investor. Natixis have provided a $30 million debt facility to a subsidiary of Tawa tofinance the acquisition. On a pro-forma basis Tawa group net assets, taking into account the PXRE Reacquisition, new debt taken on and the share placing will rise from 116 pence to121 pence per share. The acquisition will give Tawa its first operation in the US, the largestrun-off market in the world and is in accordance with Tawa's statedconsolidation strategy set out at the time of its admission to AIM in July 2007. PXRE primarily wrote reinsurance of property, marine and aerospace risks with afocus on catastrophe related coverage. Its operations were put into run-off inFebruary 2006 following the downgrading by analysts of the then parent of PXREin 2005 as a result of the 2005 hurricanes in the Gulf. Application will be made today for admission of the New Shares to AIM. Admissionis expected to become effective on 04 April 2008. Enquiries: Gilles Erulin, Chief ExecutiveTawa plc 020 7068 8044 David Haggie, Peter Rigby or Zoe Pocock 020 7417 8989Haggie Financial James Britton, Guy Wiehahn 020 7418 8900KBC Peel Hunt (nominated adviser andbroker) Notes to Editors: About Tawa Tawa plc was formed in 2001 with the purpose of acquiring and managing therun-off, portfolios of non-life insurance and reinsurance companies. It alsoprovides run-off related services through a dedicated subsidiary, TawaManagement. As a consolidator of the non-life run-off market, Tawa's strategy is to acquirecompanies and portfolios in run-off in the UK, US, continental Europe, Bermudaand elsewhere as opportunities arise. By creating a diversified portfolio of run-off businesses at different stages ofmaturity,Tawa will gain economies of scale whilst also enhancing and stabilisingearnings. Since its formation, Tawa has acquired CX Reinsurance Company Limited (CX RE)and KX Reinsurance Company limited (KX RE) and is managing the run-off of thesebusinesses. In July 2007 Tawa plc was floated on the AIM market. Further information can be found on the Company's website: www.tawaplc.com ABOUT ARGO GROUP Headquartered in Bermuda, Argo Group International Holdings, Ltd. (Nasdaq GS:AGII) is an international underwriter of specialty insurance and reinsuranceproducts in the property and casualty market. Argo Group offers a full line ofhigh-quality products and services designed to meet the unique coverage andclaims handling needs of businesses in three primary segments: Excess andSurplus Lines, Select Markets, and International Specialty. Information on ArgoGroup and its subsidiaries is available at www.argolimited.com. Legal Notice: The release, publication or distribution of this announcement in certainjurisdictions may be restricted by law and therefore persons in suchjurisdictions into which this announcement is released, published or distributedshould inform themselves about and observe such restrictions. No offer, invitation or inducement to acquire shares in Tawa plc ("Tawa" or the"Company") or any other company is made by this announcement. This announcementis not an invitation nor is it intended to be an inducement to engage ininvestment activity for the purposes of section 21 of the Financial Services andMarkets Act 2000. This announcement includes certain forward-looking statements, which can beidentified by the use of forward-looking terminology, including the terms"believes", "estimates", "anticipates", "projects", "expects", "intends", "may","will", "seeks" or "should" or, in each case, their negative or other variationsor comparable terminology, or by discussions of strategy, plans, objectives,goals, future events or intentions. These forward-looking statements relate tomatters that are not historical facts and include statements regarding theCompany and its subsidiaries (together the "Group") and its directors' currentintentions, beliefs or expectations concerning, amongst other things, theGroup's results of operations, financial condition, liquidity, prospects,growth, strategies and the industry in which the Group operates. Forward-lookingstatements are not an assurance of future performance. All forward-lookingstatements in this announcement rely on a number of assumptions concerningfuture events and are subject to known and unknown risks and a number ofuncertainties and other factors that may or may not occur in the future, many ofwhich are outside the Company's control that could cause actual results todiffer materially from such statements.. Other than in accordance with theCompany's obligations under the AIM Rules, the Company undertakes no obligationto update or revise publicly any forward-looking statements, whether as a resultof new information, future events or otherwise. In addition, any reference inthis announcement to the price at which the Company's ordinary shares have beenbought or sold in the past or the yield on ordinary shares cannot be relied onas a guide to future performance. Your attention is drawn to Part III andparagraph 3 of Part VI of the Company's AIM Admission Document which isavailable on the Company's website. These respectively contain a non-exclusivelist of risk factors to which the Company is subject and a summary of US lawsand regulations. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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