Helios Underwriting Plc Acquisition of Lloyd's Member 54532L (0194K)

TIDMHUW

RNS Number : 0194K

Helios Underwriting Plc

11 December 2018

Helios Underwriting plc

("Helios" or the "Company")

Acquisition of Lloyd's Member 54532L

Helios is pleased to announce that, in line with its strategy of increasing underwriting capacity through acquisition, it has acquired Lloyd's Member 54532L ("54532L") a limited liability member of Lloyd's of London ("Lloyd's"). The consideration payable for 54532L is GBP9.4 million in cash.

Information in respect of 54532L

The 2018 underwriting capacity of 54532L is GBP10.0m (this compares with Helios's 2018 capacity of GBP45.0m prior to this acquisition, which includes the capacity from the acquisition of Advantage DCP Limited). 54532L participates in a spread of Lloyd's syndicates that broadly matches the existing portfolio of Helios and this transaction enables Helios to continue to build its participations on the better syndicates at Lloyd's.

The consideration represents a discount of approximately 10% to the independent valuation of GBP10.4m placed on 54532L by Humphrey's and is approximately GBP0.4m below the fair value of assets being acquired.

The capacity acquired, together with the capacity Helios expects to retain, is as follows:

 
     54532L          Year of Account 
                   2016    2017   2018 
                  ------  -----  ----- 
                   GBPm    GBPm   GBPm 
                  ------  -----  ----- 
 Retained          10.3    10.8   3.0 
                  ------  -----  ----- 
 Reinsured           -      -     7.0 
                  ------  -----  ----- 
 Total Capacity    10.3    10.8   10.0 
                  ------  -----  ----- 
 

Helios will reinsure 70% of 2018 underwriting year in line with its stated policy of reducing 'on-risk' exposures.

Helios has arranged a short-term loan of GBP8.1m at 2.5% above LIBOR to assist in the financing of this acquisition which will be repaid from existing free cash resources of GBP3.2m within 54532L and from the provision of Funds at Lloyds of GBP4.9m by quota share reinsurers in respect of recent acquisitions. The Company expects to repay the loan by the end of January 2019.

In addition to the 54532L transaction, Helios is continuing to pursue a number of further Lloyd's LLV acquisitions in line with its strategy.

Additional information

54532L is a limited liability member of Lloyd's. In the year ended 31 December 2017, 54532L made a loss before tax of GBP0.4m on gross premiums written of GBP10.8m. Syndicate capacity with an estimated market value of GBP3.1m has been included in the transaction.

Helios Retained Capacity

The acquisition of 54532L, together with smaller acquisitions made earlier in the year has increased the Helios Capacity Portfolio by 35% in 2018 to date.

 
                                      Year of Account 
                                    2016    2017   2018 
                                    GBPm    GBPm   GBPm 
 Capacity - Position as at 1st 
  Jan 2018                          37.8    37.0   41.0 
                                   ------  -----  ----- 
 Retained                           17.9    11.6   12.3 
 Reinsured                          19.9    25.4   28.7 
 
 Capacity acquired since 1st Jan 
  2018 
 Retained                           15.8    15.8   5.9 
 Reinsured                            -      -     8.4 
 
 Capacity - Position as at 5(th) 
  December 2018 
 Retained                           33.7    27.4   18.2 
 Reinsured                          19.9    25.4   37.1 
                                    53.6    52.7   55.3 
                                   ======  =====  ===== 
 Increase in capacity                              35% 
 

For further information, please contact:

Helios Underwriting plc

Nigel Hanbury - Chief Executive 07787 530 404 / [e-mail]

   Arthur Manners - Chief Financial Officer                                              07754 965 917 

Stockdale Securities Limited

Robert Finlay 020 7601 6100

David Coaten

About Helios

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately GBP55m of capacity for the 2018 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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December 11, 2018 02:00 ET (07:00 GMT)