Tawa admitted to AIM with market cap of £127m
Shares in Tawa, a consolidator of non-life insurance run-off, have been admitted to trading on AIM today, with a market capitalisation of £127.4m.
The placing, at 125p per ordinary share,.has raised approximately £20.0 million for the Company, before expenses (approximately £17.0 million after expenses).
Approximately £9.8 million will be used to partially repay a bridge loan from Financière Pinault for the acquisition of KX Re which was advanced to the Company on 3 May 2007.
The remaining proceeds of approximately £7.2 million (after expenses) will be used to provide working capital.
Tawa is the first UK consolidator of the non-life run-off market to be listed.
Its strategy is to acquire companies and portfolios in run-off in the UK, US, continental Europe, Bermuda, and elsewhere as opportunities arise. Since its formation, Tawa has acquired CX Re and KX Re and is managing the run-off of these businesses.
Tawa was formed in 2001 with the purpose of acquiring and managing run-off portfolios of non-life insurance and reinsurance companies. It also provides run-off related services through a dedicated subsidiary, Tawa Management.
KBC Peel Hunt is the company’s nominated adviser and broker. It conditionally placed 16,000,000 new Ordinary Shares with investors at the Placing Price. The Placing was not underwritten by KBC Peel Hunt.
Tawa’s business model is one of active downscaling the reinsurance portfolios it acquires, essentially by way of commutation of outstanding policies. By creating a diversified portfolio of run-off businesses at different stages of the run-off process Tawa will gain economies of scale whilst also enhancing and stabilising earnings.
Gilles Erulin, Chief Executive Officer, commented; “We are pleased to have floated successfully on AIM and welcome our new shareholders. This float should provide the proper basis for our acquisition focused strategy.”
