6th Nov 2007 17:30
Kiln Ltd06 November 2007 Kiln Ltd Kiln announces intention to return up to £60 million of surplus capital andproposed sale of Kiln's 20% interest in WRB Europe to WR Berkley The Board of Kiln Ltd ("Kiln" or the "Group") is pleased to announce thefollowing: Proposed return of surplus capital In accordance with its objective of generating value for shareholders byunderwriting for profit rather than volume, Kiln announced on 6 July 2007 thatits managed Lloyd's underwriting capacity for the 2008 year of account would bereduced to £847 million. Following a detailed review of the Group's expectedcapital requirements for the 2008 year of account and beyond the Board hasconcluded that, after providing for the retention of sufficient capital tosupport the Group, including its international expansion plans and dividendcommitments and assuming that the sale of its 20% interest in W. R. BerkleyInsurance (Europe), Limited ("WRB Europe") proceeds as anticipated (as referredto below), the Group is currently expected to have surplus capital ofapproximately £60 million by the year end, equivalent to some 21% of the Group'smarket capitalisation as at 5 November 2007 of £280 million. The Board intends, in the absence of unforeseen circumstances, to return thissurplus capital to its shareholders in order to enhance shareholder returns. Itis currently envisaged that, subject to shareholder approval, this would beachieved through a share buyback by way of tender offer of £45 million andongoing market purchases under Kiln's existing share buyback authority. Theterms of the proposed tender offer will be announced upon publication of thecircular convening the special general meeting to approve the tender offer. Sale of Kiln's 20% interest in WRB Europe to W. R. Berkley Corporation In 2003, Kiln invested £16 million to acquire a 20% interest in WRB Europe, anFSA authorised insurance company which was formed by W. R. Berkley Corporation("WR Berkley") to write casualty insurance business. WR Berkley is a 20.1%shareholder in Kiln, having first acquired a shareholding in the Group in 2002,and William R. Berkley and W. Robert Berkley, Jr. are directors of Kiln. In light of changing priorities and objectives of each of the parties, Kiln andWR Berkley have agreed in principle that WR Berkley will acquire Kiln's 20%interest in WRB Europe for £24.5 million, which represents a premium of 31%(£5.8 million) in excess of the value of the investment recorded in Kiln'saccounts as at 30 June 2007. The proceeds of the sale of Kiln's interest in WRBEurope will be applied to support the tender offer referred to above and it isanticipated that independent shareholder approval for the sale will be sought atthe same special general meeting convened to approve the tender offer. It is currently anticipated that the circular convening the special generalmeeting, together with the tender offer forms, will be despatched toshareholders in December with the special general meeting being held and thetender offer being concluded in January. Kiln Ltd chief executive officer Edward Creasy commented: "Kiln is firmly committed to a strategy of active capital management in order toenhance shareholder returns. We are delighted to be in a position to return asubstantial sum to shareholders, including the proceeds of our successfulinvestment in WRB Europe, while retaining sufficient capital to pursue ourstrategic plans." Further updates will be provided to shareholders in due course. 6 November 2007 Enquiries: Kiln Ltd 020 7886 9000Edward Creasy, chief executive officerKate Rogers, head of communications College Hill 020 7457 2020Roddy WattTony Friend This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Kin Group