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What do you mean "lucky"? We need to get "together" and vote NO! Then we will be lucky.
Right. Only you would have to add back $200 million (aprox.) from the de-consolidation of Orkney II, and, to the extent it closes, the $260 million gain from the Orkney I devt-buyback. At that stage, even with an additional $250 assumed payment in order to retire the Convert (on top of the $550 it is carried at), you still have around $220 in book value for the Ordinary Shares. Or roughly $3 each.
Now, regarding the timing of things and the accounting, I bet they planned this VERY well so people might just shrug and say: "With book value at $10 million, this ain't that bad". Haha!!
For those who own the stock, the offer of $.30 is a rip off. Book is at least $.60 and that is very conservative. The excessive write offs in 2008 are coming back. Over $200 million in 2010($1.00/share) The Board did not exercise it's fiduciary duty by allowing Cerberus to buy the majority of it's outstanding debt at half price. Plenty of cash, so SR would have had a built in gain. Opportunity for a class action activity.
"Go Shop" provision
The Merger Agreement permits Scottish Re to solicit, receive, evaluate and enter into negotiations with respect to alternative proposals for a 45 day “go-shop” period beginning April 15, 2011. The special committee, with the assistance of its independent advisors, will solicit alternative proposals for the acquisition of the Ordinary Shares during this period. The Merger Agreement also provides the Investors with a customary right to match a superior proposal. There can be no assurance, however, that this process will result in a superior proposal.
We might just get lucky!
Ordinary shares equity is $10.292 million at 12/31/10.
$130.444 shareholders' equity - $120.152 non-cumulative perpetual preferred par value
Scottish Re Group Limited Announces Agreement for a Cash Out Merger of its Ordinary Shares with Affiliates of its Controlling Shareholders as well as an Agreement to Unwind the Orkney I Securitization and to Cede the Orkney I Block of Business
Company Release - 04/15/2011 18:00
HAMILTON, Bermuda--(BUSINESS WIRE)-- Scottish Re Group Limited (“Scottish Re” or the “Company”) (Pink Sheets: SKRRF) announced today that it entered into agreements with respect to two significant transactions. First, the Company entered into a merger agreement as explained below pursuant to which a newly formed subsidiary of its controlling shareholders, SRGL Acquisition, LDC (an affiliate of Cerberus Capital Management, L.P. (“Cerberus”)) and certain affiliates of Massachusetts Mutual Life Insurance Company (“MassMutual Capital” and, together with Cerberus, the “Investors”), will merge into Scottish Re and all Ordinary Shares of non-affiliate holders will be converted into the right to receive a cash amount equal to $0.30 per share (approximately $21 million in aggregate), an 87.5% premium over the average trading price of the Ordinary Shares over the past three months, which amount will be funded solely by the Investors. As a result, all of the outstanding Ordinary Shares will be owned by affiliates of the Investors. Second, the Company entered into agreements to unwind the 2005 Orkney I securitization transaction and to cede the Orkney block of business to Hannover Life Reassurance Company of America (“Hannover Life Re”), as explained more fully below. Each of these transactions is subject to certain conditions; however, neither transaction is conditioned upon completion of the other, and it is possible that the merger agreement may be effected without the Orkney transaction being consummated and vice versa.
Merger Agreement
On April 15, 2011, Scottish Re entered into an agreement and plan of merger (the “Merger Agreement”) with affiliates of the Investors, pursuant to which an affiliate of the Investors will be merged into Scottish Re and Scottish Re will continue as the surviving entity. Under the plan of merger, all Ordinary Shares (other than Ordinary Shares held by shareholders that properly exercise appraisal rights under the laws of the Cayman Islands and Ordinary Shares held by the Investors or affiliates of the Investors) will be converted into the right to receive $0.30 per share, which represents a premium of $0.14 (or 87.5%) over the average trading price of the Ordinary Shares over the past three months (collectively, the “Merger”). The Merger consideration to the Ordinary Shares, which is expected to be approximately $21 million in aggregate, will be funded solely by the Investors. Following the effectiveness of the Merger, all of the outstanding Ordinary Shares of Scottish Re will be owned by affiliates of the Investors. The Company’s Convertible Cumulative Participating Preferred Shares and its Non-Cumulative Perpetual Preferred Shares will be unaffected by the Merger and remain outstanding. Under the terms of the Registration Rights and Shareholders Agreement, dated May 2007 among the Company, MassMutual Capital, Cerberus and certain other shareholders (the “Shareholders Agreement”), any agreement for the Company to merge with the Investors or an affiliate of the Investors requires the prior approval of a majority of disinterested directors of Scottish Re’s Board of Directors (the “Board”). To this end, a special committee of the Board, comprised of disinterested directors, was appointed to consider, and determine whether to recommend to the full Board that the Company engage in, the Merger. In connection with the Merger, Houlihan Lokey acted as the special committee’s financial advisor.
Completion of the Merger is subject to a number of conditions, including (a) approval by the Company’s shareholders, including a majority of the Ordinary Shares held by non-affiliates attending and voting at the shareholders meeting (whether in person or by proxy) and (b) receipt of required governmental consents and approvals. Consummation of the Orkney I Unwind Transaction described below is not a condition to the completion of the Merger.
The Merger Agreement permits Scottish Re to solicit, receive, evaluate and enter into negotiations with respect to alternative proposals for a 45 day “go-shop” period beginning April 15, 2011. The special committee, with the assistance of its independent advisors, will solicit alternative proposals for the acquisition of the Ordinary Shares during this period. The Merger Agreement also provides the Investors with a customary right to match a superior proposal. There can be no assurance, however, that this process will result in a superior proposal.
Daniel Roth, Chief Financial Officer of Scottish Re, indicated that “this merger proposal by our controlling shareholders provides holders of our Ordinary Shares the opportunity to achieve liquidity at an attractive premium to the current trading price. At the same time, the Merger will allow the Company to simplify its capital and ownership structure without the use of Company funds.”
Scottish Re will be preparing and sending to shareholders in connection with the shareholders meeting an information statement containing more detailed information regarding the Merger. Assuming satisfaction of the conditions to closing, the Merger is expected to close in the second quarter of 2011. No assurances can be given that the conditions to closing will be satisfied and the Merger consummated.
Orkney I Unwind Transaction
On April 15, 2011, Scottish Re entered into agreements to unwind the 2005 Orkney I securitization transaction and to recapture from Orkney Re, Inc. (“Orkney Re”) and immediately cede to Hannover Life Re the defined block of level premium term life insurance policies issued by direct ceding companies between January 1, 2000 and December 31, 2003 (such defined block, the “Orkney Block”, and such transactions, as further discussed below, the “Orkney I Unwind Transaction”). The Orkney I Unwind Transaction will be accomplished in part pursuant to the Settlement and Release Agreement, dated as of April 15, 2011, by and among Orkney Re, its parent Orkney Holdings, LLC (“Orkney Holdings”), Scottish Re (U.S.), Inc. (“Scottish Re (U.S.)”), the Company, the financial guarantor of the Orkney Holdings notes, and the investment manager for the Orkney I securitization transaction (the “Settlement Agreement”). Contemporaneous with the transactions contemplated by the Settlement Agreement, Scottish Re (U.S.) will recapture the Orkney Block from Orkney Re (the “Orkney Recapture”) and immediately will cede the Orkney Block to Hannover Life Re pursuant to a coinsurance reinsurance agreement, effective January 1, 2011 (the “New Reinsurance Agreement”).
On the date of closing of these transactions, Scottish Re (U.S.) would effect the Orkney Recapture and receive recapture consideration from Orkney Re, which recapture consideration will be used in part to fund the ceding commission of $565 million due from Scottish Re (U.S.) to Hannover Life Re under the New Reinsurance Agreement. Any assets thereafter remaining in the accounts at Orkney Re will be released to Orkney Holdings. Such remaining assets will be used by Orkney Holdings to purchase all of the outstanding notes issued in 2005 by Orkney Holdings (the “Orkney Notes”) pursuant to privately negotiated purchase agreements (the “Note Purchase Agreements”) for an aggregate amount of $590 million, which represents a discount to the aggregate principal amount of $850 million of the Orkney Notes outstanding. Once repurchased, the Orkney Notes will be cancelled and Orkney Holdings will pay a dividend of any remaining assets to its parent, Scottish Re (U.S.).
Approximately $700 million of the aggregate principal amount of the Orkney Notes to be purchased are held by affiliates of Cerberus, one of our controlling shareholders. Cerberus previously informed the Company that Cerberus had acquired the Orkney Notes in the secondary market during 2009. None of the Company, Scottish Re (U.S.), Orkney Holdings, Orkney Re, or any of our other subsidiaries was a party to Cerberus’ purchase of the Orkney Notes. Under the terms of the Shareholders Agreement, the Company's execution of the Note Purchase Agreement with Cerberus requires the prior approval of the independent directors of the Board. To this end, a special committee of the Board, comprised of disinterested directors, was appointed to consider, and determine whether the Company should engage in, the Orkney I Unwind Transaction.
In connection with the Orkney I Unwind Transaction, Houlihan Lokey acted as the special committee’s exclusive financial advisor. BofA Merrill Lynch acted as exclusive financial advisor to the Company in connection with the reinsurance of the Orkney Block to Hannover Life Re.
The closing of the Orkney I Unwind Transaction, which is expected to occur in the second quarter of 2011, is subject to a number of closing conditions, including the receipt of required regulatory approvals. Consummation of the Merger described above is not one of the closing conditions. No assurances can be given that the conditions to closing will be satisfied and the Orkney I Unwind Transaction consummated.
“The Orkney I Unwind Transaction is consistent with our runoff strategy of reducing our reinsurance obligations and simplifying the operations of the Company. The transaction also strengthens the capital and surplus position of our primary U.S. operating subsidiary, Scottish Re (U.S.), and further positions it for removal of the Order of Supervision issued by the Delaware Department of Insurance in 2009,” stated Meredith Ratajczak, Chief Executive Officer of Scottish Re (U.S.).
http://www.snl.com/irweblinkx/file.aspx?IID=4021224&FID=11056708
Scottish Re Group Limited Posts to its Web Site Consolidated Financial Statements for the Year Ended December 31, 2010
BlackRock Inc owns 8,602,247 shares (1/10/11)
Controls 12.58 percent.
http://sec.gov/Archives/edgar/data/1064122/000108636411000212/scottishregrou123110.txt
Any updates here?
manipulators playing a game ; painting board lower with 100 shares trades from one person's account into another! hold on. Dont fall into this trick!
Interesting reeding ...
IT IS COMMON KNOWLEDGE that directors should act in the best interests of their corporation; however, where the interests of the corporation's different stakeholders are not aligned, directors can face complicated decisions. The board must often choose which constituency'sinterest will dominate. While in the sale of a company, this issue is relatively clear--directors obligations are to seek the best price reasonably available for the stockholders, issues can nonetheless arise when the interests of common stockholders conflict with those of preferred stockholders. A recent Delaware case deals with this situation, and reminds us of the primacy of the common stockholders.
In re Trados Incorporated Shareholder Litigation involved the saleof Trados Inc. to another company. Trados had issued preferred stock to various investors who also appointed four of Trados's seven directors. The preferred holders pushed for a sale of the company; ultimately, a deal was signed with a purchase price that would pay out the bulk (but not all) of the preferred stockholders' liquidation preference and provide Trados's management, which included two directors, with significant bonuses. The common stockholders, on the other hand, would receive nothing from the sale. Not surprisingly, some of the common stockholders sued the directors, alleging that they had negotiatedand approved the sale without considering the common stockholders' interests and, instead, were only looking out for their own and the preferred stockholders' interests.
The Chancery Court denied the directors' motion to dismiss the common stockholders' suit, and in the process illustrated two important lessons.
First, the court found that six of Trados's seven directors had a conflict of interest or otherwise lacked independence, so their actions were subject to the exacting scrutiny of the entire fairness doctrine. The two directors who received management sale bonuses were "interested" because each received "a personal financial benefit [...] not equally shared by the stockholders ... that made it improbable suchdirector could perform his fiduciary duties without being influencedby [his] overriding personal interest." The other four directors also were found to be not independent, not because they had been appointed by the preferred stockholders, but because a substantial part of their livelihood depended on the preferred stockholders (they were allemployees, directors, and/or owners of the preferred stockholders). The plaintiff stockholders therefore satisfied their burden of establishing a lack of independence by showing that such directors were "beholden to a controlling person or so under [the controlling person's]influence that their discretion would be sterilized." And, as often is the case, this conclusion lead to the result that the directors lost their motion to dismiss and will have to proceed to trial (or a more expensive settlement).
The second lesson learned from In re Trados is that when the interests of the preferred and common stockholders conflict, directors' fiduciary duties run to the common stockholders. While the preferred stockholders in In re Trados asserted that their interests were in "obvious alignment" with those of the common stockholders in obtaining the highest price possible in the sale, the court was persuaded by the plaintiffs that the real question could instead be whether the interests were aligned regarding whether to pursue a sale of the company atall or, instead, to continue to operate the company. Reframed this way, the interests of the common stockholders would not have been aligned with those of the preferred holders because selling Trados left the common stockholders with absolutely nothing.
I think there is potential upside to BV from the VIE's (I see them carrying approximately $200 million in losses there that will most likely not materialize), plus the value of NOL's. There might be some significant downside potential that we might not know about because of loss development, but that might well be taken care of by future profits and potential savings in admin costs if merged or sold to another reinsurer. I can see a $1,000 "value" by end of 2011 if they pursue a stategic transaction, but it will remain to be seen if there really is a buyer at that level.
Thanks for the clarification.
As for the dividend, that would be huge for the preferred holders and insignificant to the company.
Let's take a look at earning potential, because $80mm a quarter in mark-to-market gains are not sustainable (I know- I've been saying this for the past 2 quarters but the 4th quarter will be a wake up as rates have increased). Under the best scenario from an income statement perspective, the run-off operations excluding the unrealized gains are break even.
The current yield on the investment portfolio is around 4.5% which covers a portion of the claims.
50% of the holdings are in fixed income securities that will most likely not go up in value any further (IG).
The other 50% is in RMBS with a "YTM" of 12% (assuming a certain CPR, default & severity). Strip out the income and you are looking at 8% growth.
I just cant see how the BV gets above $900mm. Please convince me otherwise. What am I missing?
We are in complete agreement as to the facts you state. That gives them the ability to sell the company's assets, and maybe even pay themselves. Their security is senior to the common, so to the extent they take a loss through an arms-lenght transaction, there is no remedy. But if they do not .... Well, even in liquidation scenarios the common normally gets a bone thrown at them!
This is even worse than expected! If the company can't be sold, what's the current value?
And I would focus on the word "currently." Its way too earlier in the game to even try and sell it.
Good color- thaks for the clarification.
Thanks for the clarification. However, they have 6 more years for this to happen.
Take a look at how voting agreements work with mergers.
If a majority of the shareholders (MM and C that have 66 2/3rd of the voting rights) agree to vote a certain way there will not even be a proxy for the other shareholders to vote on (you get what is called an "information circular"). There isnt even a shareholder meeting required!
Not only do they have a majority of the board seats, they also have a majority of the voting rights!
http://www.articlesbase.com/law-articles/what-is-a-shareholder-voting-agreement-and-when-can-it-be-enforced-482195.html
With respect to your 6 of 11 statement, I should probably ask if you have ever heard of Floss & Harbottle?
Dividends stop accruing 5/07/12
Upon a change-in-control event, the redemption price of the Convertible Cumulative Participating Preferred Shares is an amount equal to the greater of (i) the stated value of the outstanding Convertible Cumulative Participating Preferred Shares, plus an amount equal to the sum of all accreted dividends through the earlier of (A) the date of payment of the consideration payable upon a change-in-control event, or (B) the fifth anniversary of the issue date of the Convertible Cumulative Participating Preferred Shares, or (ii) the amount that the holder of the Convertible Cumulative Participating Preferred Shares would have been entitled to receive with respect to such change-in-control event if it had exercised its right to convert all or such portion of its Convertible Cumulative Participating Preferred Shares for ordinary shares immediately prior to the date of such change-in-control event.
Page 22 paragraph 6
http://www.scottishre.com/pdf/SRGL_2010_Q3_Financial_Statements.pdf
Read the same thing.
Redemption of the Convertible Cumulative Participating Preferred Shares is contingent upon a change in control. Since neither liquidation nor a change in control is currently probable, the accreted dividends have not been accrued in our consolidated financial statements.
Page 22 paragraph 3
http://www.scottishre.com/pdf/SRGL_2010_Q3_Financial_Statements.pdf
h_man_investor, those words are in the Q 3 2010 financial statement on page 23,paragraph 3.Since I was unable to copy and paste those words I typed them.
You are wrong in the calculation of accrual to the convert. It stops after five years. They are capped at around $60 million more, or $216 million ($816 total). After that their upside is gone, unless they convert. What do they do then?
As to them paying dividends on the preferred, they might not, but that hardly has any big impact on the final outcome. (It's only around $9 million a year).
Says who? Who are you quoting?
MM and C have 6 of the 11 Board seats. They are not there to look out for the common shareholder but for their investment.
As it stands, assets are greater than liabilities by +$716,850. They have a liquidity preference of a current $748,100 (and growing) until a mandatory convert date of 5/15/16.
Lets say that book value grows from $716,850 to $1,000,000 between now and 5/15/16- a 6.1% growth in the portfolio which is possible under the best scenario ($50mm a quarter in earnings). Since the liquidation preference grows by 7.25% per year it will be $991,000.
They can either sell the company lets say for book value and get $991,000. The preferred gets $9,000 and the sh/h get $0.
Or you can convert your stock, the preferred get seniority of $120,000 and you get shares with a book value of $604,000. Which one would you choose?
It all boils down to whether or not the company can get sold. And that boils down to financing.
I'm not sure if I mentioned this before, but mgmt has indicated to me that although they may be allowed to pay a dividend on the preferred this quarter, it is there intent not to in order to conserve cash.
Bwana12, I respect your opinion but to date you have given no details to how/why you think M and CC will pay anything to the common or preferred sh/h. Please enlighten me!
H man, although in general I am in agreement with you calculations, I find that the scenario in which the common gets wiped out in reality does not exist. How will they get to the point where they sell the company and get paid back their "preference" and give nothing to the common?
"since neither liquidation nor a change in control is currently probable"I believe that statement provides hope for common shareholders, if the company continue to be profitable.
h_man_investor,thanks for the information you provided.
insomniac,thanks for your desire to help.
H Man thanks for the clarification... In my defense, I attempted, or so I thought,to EDIT out my answer to Genlou. evidently my attempt was futile.. Sorry for what seems like an inaccurate attempt at an explanation.
Huh? Please walk us through your math.
As far as I can tell the numbers in you numerator AND denominator are incorrect.
I can't believe that everyone continues to ignore the liquidation preference of the mezz equity. To review, if there is a change in control MM and C get the first $748mm. If there is a liquidation or wind up, MM and C get the proceeds after the preferred shareholders. Including these, you get a book value of -$72.1mm. Excluding then you get $31.3mm or $0.46.
I will say it again, why would MM and C go from a senior position to a junion commen equity position and reduce the value of their investment? MM and C will do whatever maximizes the recovery of their investment.
Also, without the benefit of unrealized gains in the portfolio, from an operating basis the company lost money in the quarter (roughly -$5.3mm). There is probably some more gains to get out of the MBS but not corporates!
insomniac,thanks so much for your help.
Yes ... Outstanding shares /Shareholders equity = 77cents approx.
Does SKRRF have positive book value now?
Profitable quarter.
Earnings report out.
HAMILTON, Bermuda--(BUSINESS WIRE)-- Scottish Re Group Limited (Pink Sheets: SKRRF) ("Scottish Re" or the "Company"), announced today that it has posted to its web site its consolidated unaudited financial statements for the three and nine month periods ended September 30, 2010. For the three month period ended September 30, 2010, Scottish Re reported net income attributable to ordinary shareholders of $82.4 million, or $0.38 diluted income per ordinary share, as compared to a net income attributable to ordinary shareholders of $201.9 million, or $0.92 diluted income per ordinary share, for the prior-year period.
The net income attributable to ordinary shareholders for the three month periods ended September 30, 2010 and 2009 was primarily driven by $89.0 million and $191.1 million, respectively, of net realized and unrealized gains associated with the Company’s invested assets.
To view the financial statement documents, go to Scottish Re's Web site at www.scottishre.com
Hey! I think today is earnings day after the bell.
That seems to be everyones hunch.
Does it look like earnings will be coming out after the bell on Friday?
Has anyone spoken to the new pres or to Dan Roth?
EI, great job on PFOB. Not expecting anything quick here. were only stating that comments normally only happen in a certain time frame around news. Got shares stashed away and happy.
Is it 5/07/16 yet?
SKRRF is not BRK-A or AIG with breaking news every week or within days.
Like many, maybe half, of my investments, I go in expecting the turnaround to take one one year. I am surprised when it takes less than 6 months. This one will take longer.
No one is really going to have to wait until 5/07/16 to be profitable as long as the purchase price is close to today's ($.20).
I think people only get excited here for 3 days after
1. PR
2. Earnings
In between its just watch the accumulator every now and then.
I hope you/we make a bundle.. Frankly I dont think anyone gives a damn about Skrrf.
New to Board. Would appreciate some knowledgeable posters would help with some of my confusion. I hasten to add I went thru the 2nd qtr release. Much is beyond my ability to understand.
The company says it is in run off. I interpret that as a company that is winding down and at some point will distribute such assets are available to share holders. Yes?
Any concept of a time frame?
Any idea of current BV?
Any concept of future BV?
I own RAMR which has many similarities. Any one own both?
Thanks.
Im gonna guess they make 26 cents a share from the investment portfolio for the quarter.
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As of June 30, 2008, SKRRF (former NYSE ticker SCT) had 68,383,370 ordinary shares outstanding.
BERMUDA
Crown House, Second Floor
4 Par-la-Ville Road
Hamilton, HM 08, Bermuda
telephone: (441) 295-4451
facsimile: (441) 295-7576
email: info@scottishre.com
__________________________________________________________________
MAJORITY OWNED BY:
MASSMUTUAL http://www.massmutual.com/
CERBERUS http://www.cerberuscapital.com/
SKRRF 2Q Results (released 8/20/10):
Scottish Re Posts to its Web Site Second Quarter 2010 Financial Statements
Scottish Re Group Limited (Pink Sheets:SKRRF), "Scottish Re" or the "Company", announced today that it has posted to its web site its consolidated unaudited financial statements for the three and six month periods ended June 30, 2010. For the three month period ended June 30, 2010, Scottish Re reported net income attributable to ordinary shareholders of $78.0 million, or $0.36 per diluted ordinary share, as compared to a net income attributable to ordinary shareholders of $176.9 million, or $0.81 per diluted ordinary share, for the prior year period.
The net income attributable to ordinary shareholders for the three month period ended June 30, 2010 was driven by $83.4 million of net realized and unrealized gains in the Company’s invested assets.
For the three month period ended June 30, 2009, the net income attributable to ordinary shareholders was driven by $133.1 million of net realized and unrealized gains in the Company’s invested assets and the recognition of an additional $59.8 million gain following the satisfaction of certain contingencies related to the first quarter 2009 sale to Hannover Ruckversicherung AG of a block of individual life reinsurance business.
Run-Off Strategy/"Right Side" Balance Sheet Management
Scottish Re stated, initially in the 2009 2Q report (page 12), that the company may purchase in privately negotiated transactions, open market purchases, or otherwise, additional amounts of outstanding debt, non-voting preferred securities and other liabilities. The table below details the right side of the balance sheet on an actual and market value basis. SKRUF was increased from $1.60 to $7.00 ove time. Based on the large discounts detailed below, investors questioned its ability to continue as a going concern. Investors should expect two things going forward: (1) gains on early extinguishment of debt; and (2) shrinking discounts.
Liabilities declined $58 million over the latest quarter, but the market value decreased by $76.3 million. Despite no change in Collateral Finance Facilities on an actual basis, the market value decreased nearly $38.8 million.
Interest Sensitive Contract Liabilities declined by $27.3 million actual, but only $19.5 million on a market value basis.
Long Term Debt is comprised of Capital Trust and Trust Preferred Securities.
The acquistion of Non-Cumulative Preferred below book value would not create income; the difference is a credit to Additional Paid-In Capital.
* | 2Q | 2Q | 3Q | 3Q | 4Q | 4Q | 1Q | 1Q | 2Q | 2Q | Change | Change |
Account | Actual | Market | Actual | Market | Actual | Market | Actual | Market | Actual | Market | Actual | Market |
Reserves for future policy benefits | 1,579,543 | 1,579,543 | 1,543,960 | 1,543,960 | 1,542,639 | 1,542,639 | 1,538,526 | 1,538,526 | 1,518,010 | 1,518,010 | (20,516) | (20,516) |
Interest sensitive contract liabilities | 1,843,353 | 1,510,467 | 1,802,617 | 1,499,341 | 1,518,365 | 1,485,554 | 1,493,164 | 1,460,835 | 1,465,831 | 1,441,386 | (27,333) | (19,449) |
Collateral finance facilities | 1,300,000 | 919,917 | 1,300,000 | 1,019,702 | 1,300,000 | 907,710 | 1,300,000 | 885,057 | 1,300,000 | 846,229 | - | (38,828) |
Accounts payable | 116,244 | 116,244 | 147,896 | 147,896 | 68,921 | 68,921 | 44,818 | 44,818 | 47,726 | 47,726 | 2,908 | 2,908 |
Embedded derivatives at fair value | - | - | 35,732 | 35,732 | 38,557 | 38,557 | 35,527 | 35,527 | - | - | ||
Reinsurance balances payable | 164,850 | 164,850 | 117,874 | 117,874 | 137,597 | 137,597 | 137,985 | 137,985 | 110,809 | 110,809 | (27,176) | (27,176) |
Deferred tax liability | 221 | 221 | 221 | 221 | 50,143 | 50,143 | 48,756 | 48,756 | 47,920 | 47,920 | (836) | (836) |
Long term debt at fair value | - | - | 55,068 | 55,068 | 42,147 | 42,147 | 60,180 | 60,180 | - | - | ||
Long term debt | 129,500 | 14,245 | 129,500 | 22,663 | 129,500 | 32,375 | 129,500 | 32,375 | 129,500 | 42,942 | - | 10,567 |
Total liabilities | 5,133,711 | 4,305,487 | 5,042,068 | 4,351,657 | 4,837,965 | 4,315,739 | 4,773,453 | 4,229,056 | 4,715,503 | 4,150,729 | (57,950) | (78,327) |
Mezzanine Equity | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | 555,857 | - | - |
Non-cumulative preferred | 125,000 | 8,000 | 125,000 | 19,500 | 125,000 | 28,250 | 125,000 | 30,000 | 120,152 | 33,643 | - | 3,643 |
Equity | (646,574) | (646,574) | (444,489) | (444,489) | (229,156) | (229,156) | (129,436) | (129,436) | (51,280) | (51,280) | 78,156 | 78,156 |
Non-controlling interest | 7,258 | 7,258 | 8,168 | 8,168 | 7,668 | 7,668 | 7,908 | 7,908 | 8,359 | 8,359 | 451 | 451 |
Shareholders' equity/(deficit) | (639,316) | (639,316) | (436,321) | (436,321) | (221,488) | (221,488) | (121,528) | (121,528) | (42,921) | (42,921) | 78,607 | 78,607 |
Total | 5,175,252 | 4,230,028 | 5,286,604 | 4,490,693 | 5,297,334 | 4,678,358 | 5,332,782 | 4,693,385 | 5,348,591 | 4,697,308 | 15,809 | 3,923 |
Discount | - | 945,224 | - | 795,911 | - | 618,976 | - | 639,397 | - | 651,283 |
Mezzanine Equity in the "fast forward" mode.
The table below details the impact of the ME conversion as if it occurred at 6/30/10 rather than 5/07/16.
Upon conversion, $555.9 million moves from ME to Ordinary Shares and Additional Paid-in Capital for 150 million shares. The conversion propels the $120.2 million in Non-Cumulative Perpetual Preferred to a more senior position. SKRRF would have 218.4 million shares outstanding. Shareholders's equity would now be $504.6 million on a pro forma basis (compared to $68.9 million). Book value per share would be $2.31. There is some risk that the conversion value could change prior to the mandatory conversion date.
Please note that the ME has a current liquidation preference of $737 million ($600 million par value plus $137 million in accrued and unpaid dividends). The liquidation value per share is $4.77.
* | Q2 | Adjustments | Pro Forma |
Assets | 5,348,591 | - | 5,348,591 |
Liabilities | 4,715,503 | - | 4,715,503 |
Mezzanine Equity | 555,857 | (555,857) | - |
Non-cumulative preferred | 120,152 | - | 120,152 |
Ordinary shares | 684 | 1,500 | 2,184 |
Additional paid-in capital | 1,217,880 | 554,357 | 1,772,237 |
Retained deficit | (1,269,844) | - | (1,269,844) |
Total equity | 68,872 | - | 504,577 |
Non-controlling interest | 8,359 | - | 8,359 |
Total equity | 77,231 | - | 512,936 |
Total liabilities, ME and equity | 5,348,591 | - | 5,348,591 |
SKRUF iHub Board: http://investorshub.advfn.com/boards/board.aspx?board_id=14256
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