Castelnau Group Regulatory News (CGL)

12 Jan 2007 07:01

Catlin Group Limited12 January 2007 THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. CATLIN GROUP LIMITED ACQUISITION UPDATE HAMILTON, Bermuda - Catlin Group Limited ('CGL': London Stock Exchange), theinternational specialty property/casualty insurer and reinsurer, today announcedfurther details on progress relating to the acquisition and integration ofWellington Underwriting plc ("Wellington"). Refinancing Catlin Insurance Company Ltd. ("Catlin Bermuda") has priced an issue of US$600million non-cumulative perpetual preferred shares at a dividend rate of 7.249per cent. The transaction size was increased during the bookbuilding process from US$300million to US$600 million as a result of the very strong demand from investors. The proceeds of the issue will be received on 18 January 2007. The proceeds willbe used to refinance the US$500 million short-term acquisition financingfacility Catlin established as part of the financing for the Wellingtonacquisition, and for general corporate purposes. Stephen Catlin, chief executive of Catlin Group Limited, said: "We are delighted by the success of our inaugural debt capital markettransaction and the excellent response we have received from investors. Theissue provides us with the highest-quality hybrid capital available and hasopened up a new source of capital for the Group. It is also the largest-everpreferred share issuance by a member of our peer group, both in the UK and theBermuda markets." 2007 Underwriting At the time Catlin made its offer to the Wellington Board, Catlin contemplatedthe consequences of a substantial loss of business that had been underwritten byWellington. The January 1st renewal period was an important first test of theenlarged Group's ability to retain the business it desired, and the amount ofbusiness actually lost was significantly lower than originally contemplated. Stephen Catlin commented: "We have been very encouraged during our important January 1st renewal season byour ability to retain quality business." Retention and Integration The integration of Catlin and Wellington operations is proceeding ahead ofmanagement's original plan. Underwriting operations have been fully integratedas previously reported, and the combined London underwriting staff occupied anew, purpose built underwriting floor located in Catlin's office 14 hours afterthe offer for Wellington was declared unconditional. The integration of allother operations, including financial and support functions, is either on orahead of schedule. An important element of the integration plan involves retention of key staff,and an employee retention programme has been put in place. There have been fewerthan ten unplanned departures out of a total of more than 900 employees. As part of the integration, a number of redundancies were made upon the offerbeing declared unconditional. These redundancies make up part of the projectedsynergies created by the acquisition. Relocation The relocation of all London staff to Catlin's offices located in 3 MinsterCourt is expected to be completed on schedule by 5 February 2007. Stephen Catlin said: "I am amazed at how far our integration efforts have progressed in such a shorttime frame. Within four months of Catlin's initial offer to the WellingtonBoard, Catlin will have completed the acquisition, fully integrated thecompanies' operations, refinanced the acquisition-related debt and relocated allemployees in London under one roof. The departure of a small number of employeesfrom the company is well within expectations and will have no material impact onour business going forward." - ends - For more information contact: Media Relations:James Burcke, Tel: +44 (0)20 7458 5710Head of Communications, London Mobile: +44 (0)7958 767 738 E-mail: james.burcke@catlin.com Liz Morley, Maitland Tel: +44 (0)20 7379 5151 E-mail: emorley@maitland.co.uk Investor Relations:William Spurgin, Tel: +44 (0)20 7458 5726Head of Investor Relations, London Mobile: +44 (0)7710 314 365 E-mail: william.spurgin@catlin.com Notes to editors: 1. Catlin Group Limited, headquartered in Bermuda, is an international specialist property/casualty insurer and reinsurer writing more than 30 classes of business worldwide. Catlin wrote gross premiums of US$1.4 billion in 2005 and more than US$900 million in the six months ended 30 June 2006. Catlin shares are traded on the London Stock Exchange (ticker symbol: CGL). More information about Catlin can be found at www.catlin.com. 2. On 18 December 2006, Catlin's offer for the entire issued and to be issued share capital of Wellington Underwriting plc was declared unconditional. The enlarged Catlin Group has a total net asset value of US$1.9 billion. 3. Catlin operates four underwriting platforms: • The Catlin Syndicate at Lloyd's of London (Syndicate 2003) is a recognised leader of numerous classes of specialty insurance and reinsurance. The Catlin Syndicate is the largest at Lloyd's in 2007 based on premium capacity of up to £1.25 billion. • Catlin Bermuda (Catlin Insurance Company Ltd.), which underwrites property treaty and casualty treaty reinsurance and property and casualty insurance. • Catlin UK (Catlin Insurance Company (UK) Ltd.), which specialises in underwriting commercial non-life insurance for UK clients. It also writes other classes of business written by the Catlin Syndicate. • Catlin US, which encompasses Catlin's operations based in the United States. Catlin US includes Catlin Insurance Company Inc., an admitted US insurer which will commence operations soon, and Wellington Specialty Insurance Company, a non-admitted insurer which will soon be rebranded under the Catlin banner. Catlin US has 15 underwriting offices in the United States. 4. Catlin also operates offices worldwide which allow Catlin underwriters to work closely with local policyholders and brokers. The offices are located in Canada (Toronto and Calgary), Australia (Sydney), Singapore, Malaysia (Kuala Lumpur), Hong Kong, Germany (Cologne), Belgium (Antwerp) and Guernsey. Catlin UK has regional offices in Glasgow, Leeds, Derby, Birmingham, Watford and Tonbridge. The company will soon open European offices in Paris, Barcelona, Zurich and Innsbruck. 5. This announcement is not an offer for sale of securities in the United States or any jurisdiction in which the same would be unlawful. The shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will be no public offer of the shares in the United States, the United Kingdom or elsewhere. The distribution of this announcement and the offering or sale of the shares in certain jurisdictions may be restricted by law. No action has been taken by the Company that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company to inform themselves about, and to observe, any such restrictions. No application has been or will be made to list the shares on the London Stock Exchange or any other stock exchange. This information is provided by RNS The company news service from the London Stock Exchange