Bermuda-based reinsurer Imagine is set to acquire a two-thirds share in

Lloyd's managing agent Greenwich.

The deal, which is expected to be finalised within the next month, will see Imagine acquire a two-thirds stake in the insurer.

Greenwich chairman Christopher Hodgson said: "The deal is very active and I'm sure it will happen."

Under the terms of the deal, Syndicate 994 will become predominately a reinsurance run-off syndicate.

At present, Syndicate 994, which has a 2003 capacity of £40m, predominantly writes property, personal accident and marine excess of loss business.

Hodgson said the first reinsurance run-off business written into Syndicate 994 would be that of Syndicates 1222, 947 and 923.

Hodgson added that some of Syndicate 994's current account may be retained.

In November 2002, the ratings agency Moody's placed the 'C' performance rating of 994 under review for possible downgrade.

The syndicate reported losses of 26% for 1998, and 56% for 1999. At the end of 2002, the syndicate was predicting losses of 25% and 15% for the 2000 and 2001 years of account respectively.

The Imagine Group is a reinsurance company with operations in Bermuda, Barbados and London.

The total assets and consolidated shareholders equity of the Imagine Group stood at $692m (£415m) and $230m (£138m) respectively on 30 June 2002.

The common shares of the Imagine Group are held by the Canadian company Trilon Financial Corporation and Imagine management.

Greenwich was formed in 1996 by the amalgamation of four members' agents:

R Kershaw, Castle Members Agents, Holman MacLeod and Marlborough.

Greenwich became a managing agent in 1998 following its acquisition of the Lloyd's managing agent Service Managing Agency.