2nd Jun 2009 07:00
Date: 2 June 2009
For publication in the United Kingdom only. Not for release, publication or distribution IN WHOLE OR IN PART in or into any other jurisdiction including the United States of America, Australia, Canada, the Republic of South Africa or Japan
OMEGA INSURANCE HOLDINGS LIMITED
("Omega" or the "Company")
Syndicate Capacity Offer
and
move from AIM to the Official List
Overview
Capacity Offer to acquire additional capacity on Lloyd's Syndicate 958 by way of a Share Offer with a Cash Alternative
Depending upon the level and type of acceptances as between the Share Offer and the Cash Alternative the limit of the Capacity Offer is between £50 million and £125 million
Share Offer of 0.332 of a new common share per £1 of capacity equating to a value of 45 pence per £1.00 of capacity
Cash Alternative of 40p per £1 of capacity
Capacity Offer to close on 1 July 2009
Application by Omega for admission to the Official List of the UK Listing Authority with effect from 7 July 2009
Capacity Offer
Omega today announces that it is making an offer on behalf of Omega Dedicated Limited ("ODL"), a wholly-owned subsidiary of Omega, to acquire capacity on Syndicate 958 not already owned by the Omega group for the 2010 and each subsequent year of account (the "Capacity Offer").
The Capacity Offer is a limited offer to acquire capacity up to a limit between £50 million and £125 million of Syndicate 958's allocated capacity for 2009 ("Syndicate Capacity"), not already owned by the Omega group, equating approximately to between 20 per cent. and 50 per cent. of Syndicate Capacity. The Capacity Offer comprises a Share Offer with a Cash Alternative (as described below).
The final amount of capacity that Omega will acquire will depend upon the level and type of acceptances as between the Share Offer and the Cash Alternative. The maximum amount of capacity which Omega may acquire is £125 million (the "Maximum Amount").
The consideration offered under the Share Offer is 0.332 of a new common share in the capital of the Company per £1.00 of capacity (the "Share Offer"), valuing each £1.00 of capacity at 45 pence based on the closing mid market price of Omega's common shares on 29 May 2009 of 135.5p, the latest practicable date prior to the making of the Capacity Offer. The price offered under the Cash Alternative is 40 pence per £1.00 of Capacity (the "Cash Alternative"). If all acceptances are for the Cash Alternative and no acceptances for the Share Offer are received the maximum amount of Capacity which Omega may acquire is £50 million (the "Base Amount").
In the event that the members of Syndicate 958 who accept the Capacity Offer all accept the Share Offer and acceptances are equal to the Maximum Amount, the aggregate value of the Share Offer will be approximately £56.2 million and 41,500,000 new common shares will be issued under the Share Offer, equivalent to approximately 14.7 per cent. of the issued share capital of Omega as enlarged by the Share Offer.
If all those members of Syndicate 958 who accept the Capacity Offer accept the Share Offer and acceptances are equal to the Base Amount, the aggregate value of the Share Offer will be approximately £22.5 million, and 16.6 million new common shares will be issued under the Share Offer, equivalent to approximately 6.4 per cent. of the issued share capital of Omega as enlarged by the Share Offer.
If all those members of Syndicate 958 who accept the Capacity Offer elect for the Cash Alternative and acceptances are equal to the Base Amount, the aggregate value of Cash Alternative will be approximately £20 million and no new common shares will be issued.
New common shares in the capital of the Company issued pursuant to the Share Offer will be credited as fully paid and will rank from Admission pari passu in all respects with the existing common shares in the Capital of the Company, including the right to receive a dividend, if any, declared relating to the financial period to 30 June 2009, which (if paid) is expected to be paid in the fourth quarter of the 2009 financial year.
The Omega group owns and provides capital support for 16.4 per cent. of Syndicate 958's underwriting capacity for its 2009 year of account.
Following the £123.7 million (net of expenses) fundraising in January 2009, the directors of Omega (the "Directors") have considered the options available to the Omega group to utilise these additional funds to grow the Omega group's underwriting capacity most efficiently. In assessing this, the Directors have taken into account a range of considerations including the historical track record of Syndicate 958; the proven ability to grow organically the Omega group's premium income; the underwriting opportunities currently available to the Omega group and the demand being shown by brokers and insureds for the additional diversification provided to them by the subscription market.
In addition to the significant opportunities available to the Omega group's newer underwriting platforms in Bermuda and the United States, the Directors also believe there to be a strong strategic and commercial rationale for increasing the Omega group's ownership of Syndicate 958's capacity for the 2010 year of account and beyond. The view of the Directors is further reflected in the current trading statement made by the Chairman of the Omega group at its annual general meeting held on 22 May 2009.
The Capacity Offer will be made solely pursuant to an offer document (the "Offer Document"), which will be issued in accordance with the Lloyd's rules relating to capacity offers. The Capacity Offer will remain open for acceptance until 1 July 2009. Documentation relating to the Capacity Offer, which is the Offer Document setting out the terms and conditions of the Capacity Offer together with an acceptance form and a letter of authority in connection therewith, will be posted to members of Syndicate 958 for the 2009 year of account today other than those resident or domiciled in the Prohibited Territory or any of the Excluded Territories (as defined below).
Kinmont is acting as Lloyd's sponsor to the Capacity Offer and as financial adviser in relation to the Company's Admission to the Official List.
Non-UK resident Names
As a result of legal and practical considerations, the Share Offer is only being made available to UK members of Syndicate 958 and is not being made available to members who are resident or domiciled in any jurisdiction outside the United Kingdom or who are US Persons.
This announcement does not constitute a solicitation, invitation or offer to persons in Singapore (as the "Prohibited Territory") or Antigua, the Bahamas, Barbados, Cyprus, the Channel Islands, the Czech Republic, Gibraltar, Guernsey, Italy, Jersey, Kenya, Latvia, Malta, Monaco, the Netherlands, Norway, Portugal, Thailand (collectively the "Excluded Territories") or any jurisdiction where a solicitation, invitation or offer could be contrary to the law.
Admission to the Official List
Further to Omega's announcements on 8 December 2008 and 22 May 2009 of its intention to apply for admission of its common shares to the Official List of the UK Listing Authority (the "Official List"), the Company confirms that an application will be made for the Company's common share capital issued and to be issued pursuant to the Capacity Offer to be admitted to the Official List and to trading on the London Stock Exchange's market for listed securities ("Admission") and pursuant to Rule 41 of the AIM Rules the Company hereby gives notice of the intended cancellation of trading of the Company's common shares on AIM.
It is expected that Admission will become effective and dealings in Omega's common shares on the Official List will commence at 8.00 a.m. on 7 July 2009, subject to receipt of the necessary approvals from the UK Listing Authority and the London Stock Exchange. Cancellation of trading in the Company's common shares on AIM is expected to occur at the same time.
Since its admission to AIM in 2005 and establishment of the Company as the holding company of the Omega group in Bermuda in 2006, the Company has developed and executed its strategy of becoming a global insurance and reinsurance business with operations in Bermuda, London, the US and Cologne. The Company is also successfully executing its strategy of having more of its own capital at risk.
Commenting on the move to the Official List, Walter Fiederowicz, Chairman, Omega Insurance Holdings, said:
"The directors believe that the Company has now reached a size at which it will benefit from the increased international profile of the Official List. The move will assist in broadening Omega's access to domestic and international investors, increasing liquidity of the shares and raising the profile of the Company with both the investor community and the insurance market. The directors of Omega also believe that a move to the Official List will increase public awareness of the Company".
J.P. Morgan Cazenove Limited ("J.P. Morgan Cazenove") is acting as broker and sponsor to the Company in relation to its Admission to the Official List and from Admission Cenkos Securities plc will continue as joint broker.
A prospectus prepared by the Company in connection with Admission (the "Prospectus") will be posted to shareholders today and will also be published today with a copy submitted to the Financial Services Authority for publication through the document viewing facility which is situated at The Financial Services Authority, 25 North Colonnade, Canary Wharf, London E14 5HS. The Prospectus will include a notice of a special general meeting and will explain the actions which shareholders and holders of Depositary Interests will be requested to take. Only shareholders entered on the register of members at 5:00pm Bermuda time on 28 May 2009 will be entitled to attend and vote at the meeting (either in person or by proxy) in respect of the number of common shares entered on the register of members at that time and on that date. A copy of the published Prospectus will also be available for viewing on the Company's website at www.omegauw.com.
Expected Timetable of Principal Events
|
Closing date of the Capacity Offer and announcement |
1 July 2009 |
|
Time and date of Special General Meeting |
9:00 a.m. on 2 July 2009 |
|
Announcement of outcome of Capacity Offer |
2 July 2009 |
|
Existing and New Omega shares admitted to the Official List and dealings commence on the London Stock Exchange |
8:00 a.m. on 7 July 2009 |
Enquiries:
For further information please contact:
|
Richard Tolliday, Chief Executive Officer, Omega
|
Today only:
After today:
|
+44 (0)20 7554 1400
+1 441 294 6610
|
|
Nick Garrett/Conor Hillery, J.P. Morgan Cazenove
|
|
+44 (0)20 7588 2828
|
|
Gavin Kelly/John O’Malley, Kinmont
|
|
+44 (0)20 7897 9100
|
|
Ian Soanes/Max Hartley, Cenkos Securities
|
|
+44 (0)20 7397 8900
|
Media Enquiries:
|
Byron Ousey/Michael Turner, Kreab Gavin Anderson
|
|
+44 (0)20 7554 1400
|
This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. There will be no offer of securities in the United States.
Notes to Editors
Omega became the holding company of the Omega group of companies (the "Omega Group") on 9 November 2006 when the scheme of arrangement of Omega Underwriting Holdings PLC (the Omega Group's previous holding company and now wholly-owned by Omega) ("OUH") became effective. On the same date the common shares of Omega were admitted to trading on AIM, the admission of OUH's shares to trading on AIM was cancelled and OUH was re-registered as a private limited company.
The Omega Group, through its wholly owned subsidiary, Omega Underwriting Agents Limited, acts as a Lloyd's managing agent for Syndicate 958 and in February 2006 established a new insurance and reinsurance business, Omega Specialty Insurance Company Limited ("Omega Specialty"), based in Bermuda. In September 2006 Omega incorporated a new surplus lines insurer, Omega US Insurance, Inc. ("Omega US Insurance"), in Delaware which is held under a Delaware incorporated intermediate holding company Omega US Holdings, Inc.
Syndicate 958
Syndicate 958's capacity for the 2009 year of account is £249 million. The Syndicate has made an underwriting profit in every closed year of account since its inception in the 1980 year of account. The Syndicate has focused predominantly on short-tail, diversified property orientated insurance and reinsurance with a focus on small to medium sized insureds, with whom the Omega Group has built long-standing track records.
On 27 May 2008, the A.M. Best Company, Inc. reaffirmed the Syndicate's Financial Strength Rating of 'A' (Excellent) and an Issuer Credit Rating of 'a+' (Excellent).
Omega Specialty
Omega Specialty received its license from the Bermuda Monetary Authority in February 2006 as a Class 3 insurer and has been reclassified as a Class 3B insurer. It was capitalised at US$172 million. Since then, Omega Specialty's premium income has been predominantly derived from its reinsurances of Syndicate 958 and the Omega Group's Lloyd's corporate member, Omega Dedicated, together with its increasing book of third party reinsurances where it seeks to underwrite business of a similar type and composition to be complementary to that underwritten by Syndicate 958.
On 27 May 2008, the A.M. Best Company, Inc. reaffirmed Omega Specialty's Financial Strength Rating of 'A-' (Excellent).
Omega US Insurance
Omega US Insurance is an insurance company licensed in the state of Delaware and underwrites on a surplus lines basis in other US States. Omega US Insurance is currently eligible to write business in 42 US jurisdictions (including on an admitted basis in Delaware) and applications are pending in further states. It was capitalised at US$50 million from the net proceeds of a share placing by OUH in October 2006.
On 3 December 2007, Omega US Insurance received a Financial Strength Rating from A.M. Best Company, Inc. of 'A-' (Excellent). The rating was reaffirmed on 3 February 2009.
Legal Notice
No offer, invitation or inducement to acquire shares or other securities in Omega, or any other company nor any solicitation of any vote or approval in any jurisdiction pursuant to the matters referred to in this announcement is being made by this announcement. The Prospectus will contain information on Omega and its subsidiaries and common shares, including details of how to vote in favour of the resolutions to be proposed at the special general meeting. Any decisions on how to vote on those resolutions should be made only on the basis of the information contained in the Prospectus.
This announcement does not constitute a solicitation, invitation, or offer to persons in Singapore or any other jurisdiction where a solicitation, invitation or offer could be contrary to law.
Any person who is considering participating in the Capacity Offer should read carefully the Offer Document relating to such Capacity Offer and the risk factors set out therein and (for UK members who are considering accepting the Share Offer) the Prospectus and the risk factors set out in that document. Copies of the Offer Document and Prospectus and other relevant documents are available, free of charge, during normal business hours on reasonable notice on any week day (except Saturdays, Sundays and public holidays) at the offices of Omega at 44 Church Street, Hamilton, Bermuda, HM12 and at the offices of Dewey & LeBoeuf, No.1 Minster Court, Mincing Lane, London EC3R 7YL whilst the Capacity Offer remains open for acceptance.
This announcement is issued by the Company and has been approved by Kinmont Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, for the purposes of section 21 of the Financial Services and Markets Act 2000.
This announcement relates to the Capacity Offer which is being sponsored by Kinmont Limited and is being made by the Company for and on behalf of ODL.
Omega is a connected company of the managing agent, Omega Underwriting Agents Limited and ODL, an existing member on Syndicate 958. Omega and ODL are each interested in this Capacity Offer.
The securities which may be issued pursuant to the terms of the Capacity Offer may be illiquid and there may not be a market for them. The value of securities may go down as well as up.
This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Neither the Company's common shares nor any shares issued pursuant to the Capacity Offer have been or will be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or qualified for sale under the laws of any state or other jurisdiction of the United States nor under any relevant securities laws of Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan or any other jurisdiction outside the United Kingdom. Any shares issued pursuant to the Capacity Offer may not be offered, sold or delivered, directly or indirectly, in or into the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan or any jurisdiction outside the United Kingdom or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act).
This announcement has been prepared in accordance with Lloyd's requirements. The Company has confirmed to Lloyd's that this document complies with the rules in relation to capacity arrangements made by Lloyd's under the Conversion and Related Arrangements Bye-Law (No. 22 of 1996) (the "Capacity Offer Rules"). This announcement has not been approved by Lloyd's.
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as sponsor to the Company and for no-one else in connection with Admission only and will not regard any other person as its client or be responsible to anyone other than the Company for providing the protections afforded to clients of J.P. Morgan Cazenove or for providing advice in relation to the Prospectus and the matters referred to in this announcement.
Kinmont, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to the Company in connection with Admission and Lloyd's Sponsor to the Company and ODL in relation to the Capacity Offer and is not acting for any other person in connection with the Capacity Offer or Admission. Kinmont will not be responsible to anyone other than the Company or ODL for providing the protections afforded to clients of Kinmont or for providing advice in relation to the Capacity Offer or Admission or for any other matter referred to in this announcement.
This transaction is a substantial transaction under Rule 12 of the AIM Rules for Companies (the "AIM Rules"). This announcement is made in accordance with Rule 12 and Schedule 4 of the AIM Rules. No statement above constitutes a profits forecast or should not be interpreted to mean that earnings in any period will be higher than or equal to earnings in a previous period.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
Certain statements contained in this announcement may constitute forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and involve other factors that are in many cases beyond the company's control. These forward-looking statements speak only as at the date of this announcement and are not an assurance of future performance. The Group's actual results of operations, performance, achievements, financial condition and liquidity, and the development and results of the industry in which the Group operates, may differ materially from those expressed or implied by the forward-looking statements contained in this announcement. Other than in accordance with the Company's obligations under any applicable legal or regulatory requirement (including the AIM Rules, Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules), the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this document.
Related Shares:
Orascom Inv