Shareholders of Sirius International Insurance Group have agreed to remain as investors in the company following the completion of its merger with Bermuda-based reinsurer Third Point Reinsurance.
First announced last month, the merger will see Sirius and Third Point Re combine into an entity called SiriusPoint Ltd, in a transaction valued at around $788 million.
Under the new shareholder agreement, the four institutional investors that hold Sirius’s Series B Preference Shares have agreed to convert these shares into up to $260 million face value of newly-issued Series B Preference Shares of SiriusPoint.
The four investors are Bain Capital Special Situations Asia, CCOF Master, Centerbridge Credit Partners Master, and Centerbridge Special Credit Partners III.
The new preference shares will be perpetual in nature, carry an 8.00% annual cumulative cash dividend, and will be callable by SiriusPoint on each fifth anniversary of the closing of the merger.
At the time of issuance, SiriusPoint will have the option to substitute up to $60 million in cash in lieu of an equal face amount of the New Preferred Stock, or pay in cash the agreed amount of $260 million in full.
In exchange for the shares, the Cornerstone Investors have also agreed to toll certain potential claims they may have against Sirius from the date of the agreement until the closing of the merger, after which they will release any claims.
“Reaching an agreement with the Cornerstone Investors is an important milestone for SiriusPoint,” said Sid Sankaran, currently Chairman of Third Point Re and slated to be Chief Executive Officer of SiriusPoint.
“This agreement provides us with certainty regarding our capital position going forward, resolves amicably a potential litigation, and constitutes an important endorsement of SiriusPoint by sophisticated investors,” Sankaran continued.
“Having this impressive slate of investors in the combined company further reinforces our strong balance sheet as we support our clients and broker partners in the upcoming renewal season.”
