Conversion of CCPP Shares
As discussed in Note 7, “Mezzanine Equity - Convertible Cumulative Participating Preferred Shares”, the CCPP Shares were convertible at the option of the holder, at any time, into an aggregate of 150,000,000 Ordinary Shares of SRGL. On May 7, 2016, which represented the ninth anniversary of issue, and in accordance with the CCPP Certificate of Designations, the CCPP Shares converted into an aggregate of 150,000,000 Ordinary Shares of the Company.
We accounted for the conversion of the CCPP Shares in accordance with FASB ASC 470-20. As a result, and in accordance with the CCPP Certificate of Designations, the CCPP Shares were converted into an aggregate of 150,000,000 Ordinary Shares, with each Ordinary Share having a par value of $0.01, representing an additional $1.5 million in the Ordinary Shares amount in the Company's Consolidated Balance Sheets. The remaining balance of the CCPP Shares amount of approximately $554.4 million that was previously classified under Mezzanine Equity in the Consolidated Balance Sheets, and was over and above the Ordinary Share conversion amount of $1.5 million as described earlier, was reclassified to Additional Paid-in Capital (“APIC”).
The conversion of the CCPP Shares had no impact on the results of operations of the Company and only impacted the Consolidated Balance Sheets.
The table below provides an illustration of the changes to the Company's Consolidated Balance Sheets as follows:
see page 28. http://www.scottishre.com/pdf/Scottish%20Re%20Group%20Limited%201Q%202016%20Consolidated%20Financial%20Statements.pdf
The conversion of the CCPP Shares had no material effect on the operations of the Company.