Lancashire continuity equity arrangement provides capital at floor price
Lancashire has entered into a contingent equity arrangement with a large financial institution.
The deal give Lancashire an option to issue up to 9,786,000 common shares (approximately 5% of its issued share capital) at a price per share equal to the greater of the market value of the shares at the time of exercise or US$5.00.
Neil McConachie, chief financial officer said: “This arrangement provides a committed source of equity capital at a guaranteed floor price which the company, at its discretion, can access. While we have no current plans to exercise the option, the transaction reinforces our strategy to actively and prudently manage capital through the cycle.”
“While we have no current plans to exercise the option, the transaction reinforces our strategy to actively and prudently manage capital through the cycle
Neil McConachie, chief financial officer
McConachie added: “We believe our business plan, as a diversified direct
specialty insurance writer, lends itself to strong performance through hard and soft cycles. We underwrite a diverse worldwide portfolio of short-tail property risks. Programs are mostly written on a direct basis, and the majority of the 2007 book is not expected to be significantly exposed to natural catastrophes. We believe this strategy will generate above average returns for shareholders over time.”
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