Bermuda-based insurance firm R&Q confirmed today that it has filed for liquidation but said this will not affect the sale of its programme management business.
In a stock exchange announcement this morning, R&Q said that it had filed for liquidation at the Bermuda Supreme Court last Friday.
R&Q said this process would result in the “prompt closing” of its programme management business, which was accredited by Canadian private equity firm Onex Corporation.
“The board believes that this will provide the best possible result in the circumstances for the company’s stakeholders,” it said.
In a separate statement, R&Q announced plans to sell Incepteum Insurance to Malta-based Marco Capital. The completion of this deal is conditional on the completion of the Accredited deal.
“The transaction includes and is subject to the completion of certain reinsurance agreements, between R&Q entities, Accredited Insurance Europe, and R&Q Re and Inceptum being novated to Marco Re,” the statement said.
Novation is when a contract is rewritten, in this case, substituting one party to the contract with another.
The transaction has already received approval from R&Q’s board. Still, it is subject to change of control approval by the Prudential Regulation Authority (PRA) and other regulatory approvals as required for the reinsurance agreements.
At the end of December last year, Inceptum had net assets of around £19m. In the last calendar year, it generated a loss of £2m.
R&Q will receive £11.25m for the sale of the shares in Inceptum. However, including the impact of the novation of the reinsurance arrangements, the deal is expected to generate around £13m of liquidity for the firm.
R&Q has faced deepening financial struggles over the past year due to a range of factors, including costs relating to the sale of Accredited and growing losses in its legacy business, R&Q Legacy.
In April, it warned it would face a “significant pre-tax loss” for the year due to “adverse” reserving developments in R&Q Legacy.