Bermuda domiciled global multi-line insurer and reinsurer, Sirius International Insurance Group, has announced the expansion of its strategic review and the launch of a formal process to sell the company.
Previously, the firm’s Board of Directors engaged Barclays to assist in the review of the terms of a capital raise arrangement as compared to other potential strategic alternatives for Sirius.
An announcement explains that the Board delegated to a committee comprised of independent directors the review of strategic alternatives, and to then submit a recommendation for approval by the re/insurer’s Board.
Following the completion of the review, which included numerous expressions of interest with representatives of CM Bermuda Limited, a wholly owned subsidiary of China Minsheng Investment Group Corp., Ltd. (CMIG) and Sirius Group’s controlling shareholder, the Strategic Review Committee has approved the launch of a formal sales process for Sirius Group.
The Strategic Review Committee will be tasked with overseeing the sale process, as advised by Barclays, in collaboration with a Transaction Advisory Committee, which will include representatives of CM Bermuda and its advisors.
Kernan Oberting, President and Chief Executive Officer (CEO) of Sirius Group, commented: “I am pleased that we have secured CM Bermuda Limited’s commitment to launch a coordinated sales process to ensure the engagement necessary to facilitate an optimal outcome.”
Towards the end of last year, both A.M. Best and Fitch Ratings turned negative on Sirius Group citing adverse impacts from its association with CIMG and also deteriorating operating performance metrics that have impacted the firm since 2017.
At the time, Fitch noted continued concerns around unresolved debt and liquidity crisis at CMIG, which owns approximately 86% of Sirius’ common shares. Fitch warned that this could ultimately have negative implications to Sirius Group’s competitive market position over time.
Peter Tan, Chairman of CM Bermuda Limited’s parent, CMIG International Holding Pte. Ltd., said: “We appreciate the opportunity to work cooperatively and collaboratively with the management team and the Strategic Review Committee to achieve an optimal outcome for Sirius Group. The involvement of key stakeholders is critical to ensuring an orderly and successful outcome for any transaction.”
Meyer Frucher, Chairman of the Board, added: “Maintaining the strength of Sirius Group’s 75-year deep-rooted franchise and maximizing value for all stakeholders remains our number one priority. Our executive team supported by Sirius Group’s talented and dedicated employees will continue operations as usual, as we work with CM Bermuda Limited towards completing the strategic review process and announcing a transaction expeditiously.”
In light of the ongoing Covid-19 pandemic, this may well be a challenging time for a sale. As Reinsurance News discussed recently, pressures from the coronavirus outbreak is causing a surge in market volatility and significant decreases in share prices, so there could be some uncertainty around some of the larger merger and acquisition (M&A) deals announced recently.
