French reinsurer Scor is seeking shareholder approval to increase its capital by up to €149 million, mostly to buy out a partner in an Irish reinsurance venture, a regulatory document showed yesterday.
According to proposals sent to shareholders, Scor wants backing for its board to be able to increase capital in various ways, including issuing ordinary shares or securities that give access to capital, such as convertible bonds.
The move would facilitate Scor in acquiring US investment group Highfields Capital's 47 per cent stake in the IRP holding group of Irish Reinsurance Partners Ltd, which they formed in December 2001 to reinsure part of Scor's non-life contracts.
Analysts in the past have estimated the move could cost an estimated €180 million to €200 million and give Scor total control over a profitable affiliate and high-quality policies, providing a steady stream of income.
Highfields can delay the sale by a year but analysts say the deal likely would occur this year.
Scor would like to resolve the buyout of IRP because it has been considered a hurdle to a rating upgrade it needs from rating agency Standard & Poor's to win new business.
The relationship between Scor and Highfields has been strained. Highfields has sued Scor twice saying IRP was run without regard to Highfields's interests.
Highfields said in a statement earlier this week Scor would not be taking over IRP because of Scor's alleged failure to satisfy procedures and provide financial information required by their 2001 agreement. - (Reuters)
