Scottish Re Group Limited has announced that it has started the implementation of a sale and restructuring plan for Scottish Annuity & Life Insurance Company (Cayman) Ltd.(SALIC) and Scottish Holdings, Inc. (SHI), SALIC’s U.S. subsidiary.
According to an announcement, the sale and restructuring plan is being implemented via the commencement by SALIC and SHI, of U.S. Chapter 11 proceedings in the United States Bankruptcy Court of Delaware on January 28th, 2018.
Furthermore, in connection with the Chapter 11 proceedings, Scottish Re revealed that a stock purchase agreement has been completed between SALIC and SHI, and an investment fund that is advised by Hudson Structured Capital Management Ltd. Once the stock purchase has closed, Hudson Structured will own 100% of the stock of the restructured SALIC.
According to a statement on the sale and restructuring, the SALIC/SHI Chapter 11 is a “critical step in Scottish Re’s sale and restructuring plan,” which also includes the sale to Hudson Structured of some SALIC subsidiaries, including Scottish Re (U.S.), Inc. (SRUS), and Scottish Re (Dublin) dac (SRD).
“Certain Scottish Re subsidiaries, such as SRUS, SRD, and Scottish Re Life (Bermuda) Limited (“SRLB” and together with SRUS and SRD, the “Non-Debtors”), are not debtors in the SALIC/SHI Chapter 11 and as such, contracts and relationships between the Non-Debtors and their reinsurance and other counterparties, vendors, and employees are largely unaffected by the SALIC/SHI Chapter 11 filing.
“SALIC faces acute liquidity issues in the first quarter of 2018 as a result of the historically adverse performance of Scottish Re’s legacy book of yearly renewable term (“YRT”) reinsurance business, and the growing strain created by the upcoming payments due on 20 quarters of accrued and deferred interest on trust preferred securities guaranteed by SALIC,” explains the announcement.
Scottish Re’s Board of Directors voted on January 24th, 2018 to authorise and direct SALIC to file the SALIC/SHI Chapter 11, and generally to implement the sale and restructuring plan, and the stock purchase remains subject to closing conditions related to the SALIC/SHI Chapter 11, as well as the receipt by Hudson Structured of regulatory approvals necessary to effectuate a change of control of the subsidiaries.
