RICHMOND, Va., Sept. 27, 2021
/PRNewswire/ -- Markel Corporation (NYSE: MKL) and Markel
CATCo Investment Management Ltd. (MCIM) today announced the terms
of a Buy-Out Transaction that provides for an accelerated return of
substantially all the net asset value (NAV) in Markel CATCo
Reinsurance Fund Ltd. (the Private Fund) and CATCo Reinsurance
Opportunities Fund Ltd. (the Public Fund, together with the Private
Fund, the Funds) to investors in the Funds. The Funds, which are
insurance-linked securities funds managed by Bermuda based MCIM, have been in runoff since
June 2019. Affiliates of Markel Corporation will be providing
funding of up to approximately $150
million to facilitate the Buy-Out Transaction of the
retrocessional segregated accounts of the Funds. In addition,
an affiliate of Markel Corporation will be providing tail risk
cover that will allow for the return of approximately
$100 million of trapped collateral to investors in the Private
Fund's separately structured reinsurance offering, known as the
Aquilo Fund segregated account.
Under the Buy-Out Transaction, investors in the Funds will
retain the right to receive any outstanding NAV plus any
upside at the end of the applicable run-off period if currently
held reserves exceed the amounts necessary to pay ultimate claims.
The affiliates of Markel Corporation financing the Buy-Out
Transaction expect to receive a return of all their funding by the
end of the run-off periods.
MCIM is extending an opportunity to all investors in the Funds
to provide a support undertaking with respect to the Buy-Out
Transaction on or before October 22,
2021 (Early Consent Deadline) in order to become eligible to
receive at closing a fee equal to one percent (1%) of the
investor's proportional entitlement to the current NAV as at
closing (Early Consent Fee).
The boards of directors of each of the Private Fund and Public
Fund have unanimously determined that the Buy-Out Transaction is in
the best interests of each of their respective Funds (taking into
account the interests of their respective investors) and recommend
that their investors return support undertakings by the Early
Consent Deadline.
Assuming satisfactory investor support for the Buy-Out
Transaction is received by the Early Consent Deadline, each of the
Funds will propose to their respective investors schemes of
arrangement under Bermuda law
(Schemes). Pursuant to the Schemes and the Buy-Out
Transaction, all investors, the CATCo group companies (MCIM, the
Public Fund, the Private Fund and Markel CATCo Re Ltd.), Markel
Corporation and each of their related parties, among others, will
grant customary mutual releases of all claims related to the
Buy-Out Transaction, the CATCo group companies' businesses and the
investors' investment in the Funds.
To support and facilitate the implementation of the Buy-Out
Transaction through the Schemes, the CATCo group companies have
resolved to and will file today applications with the Supreme Court
of Bermuda for the appointment of
Simon Appell of AlixPartners UK LLP
and John McKenna of Finance &
Risk Services Ltd. as joint provisional liquidators (JPLs) with
limited powers for restructuring purposes only.
The Buy-Out Transaction has been prompted as a result of
threatened and asserted claims by two small investors that,
although the Funds believe these claims to be meritless, have
disrupted the continued timely and orderly return of additional
capital to investors and is being offered to prevent the potential
for inequitable treatment of some investors at the expense of all
other investors. The appointment of the JPLs will enable the
implementation of the Buy-Out Transaction and the approval of the
Schemes to best ensure the fair, equitable and accelerated
distribution of assets to all investors in the Funds.
About Markel Corporation
Markel Corporation is a diverse financial holding company
serving a variety of niche markets. The company's principal
business markets and underwrites specialty insurance products. In
each of the company's businesses, it seeks to provide quality
products and excellent customer service so that it can be a market
leader. The financial goals of the company are to earn consistent
underwriting and operating profits and superior investment returns
to build shareholder value. Visit Markel Corporation on the web at
www.markel.com.
Disclaimer and important notices
This announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer or
invitation to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities or the solicitation of any
vote or approval in any jurisdiction pursuant to the Buy-Out
Transaction or otherwise. The Schemes will be made solely pursuant
to the terms of the scheme documents to be sent to investors in the
Funds in due course. The scheme documents will contain the full
terms and conditions of the Schemes, including details of how to
vote in respect of them. Any decision in respect of, or other
response to, the Schemes should be made only on the basis of the
information in those documents. The information contained in this
announcement is for background purposes only and no reliance may or
should be placed by any person for any purpose whatsoever on the
information contained in this announcement or on its completeness,
accuracy or fairness. Recipients of this announcement should
conduct their own investigation, evaluation and analysis of the
business, data and property described in this announcement. This
announcement does not constitute a recommendation concerning any
investor's decision or options with respect to the Buy-Out
Transaction. The information in this announcement is subject to
change.
The distribution of this announcement and the terms of the
Buy-Out Transaction are subject to restrictions and may not be made
except pursuant to registration with or authorization by the
relevant securities regulatory authorities or an exemption
therefrom. Therefore, persons who may come into possession of this
announcement are advised to consult with their own legal advisors
as to what restrictions may be applicable to them and to observe
such restrictions. This announcement may not be used for the
purpose of an offer or invitation in any circumstances in which
such offer or invitation is not authorized.
No action has been or will be taken in any jurisdiction by the
Funds that would or is intended to permit a public offering, or any
other offering under circumstances not permitted by applicable law,
of any securities.
This announcement has not been approved by an authorized person
for the purposes of section 21 of the U.K. Financial Services and
Markets Act 2000. Accordingly, this announcement is not being
distributed to, and must not be passed on to, the general public in
the U.K. This announcement is for distribution only to persons who:
(i) are outside the U.K.; (ii) are investment professionals, as
such term is defined in Article 19(5) of the U.K. Financial
Services and Markets Act 2000 (Financial Promotion) Order 2000 (as
amended, the Financial Promotion Order); (iii) are persons falling
within Article 49(2)(a) to (d) (high net-worth companies,
unincorporated associations, etc.), of the Financial Promotion
Order; (iv) are members or creditors of the Private Fund or the
Public Fund; or (v) are persons to whom an invitation or
inducement to engage in investment activity (within the meaning of
section 21 of FSMA) may otherwise lawfully be communicated or
caused to be communicated (all such persons together being referred
to as Relevant Persons). This announcement is directed only at
Relevant Persons and must not be acted on or relied on by persons
who are not Relevant Persons. Any investment or investment activity
to which this announcement relates is available only to Relevant
Persons and will be engaged in only with Relevant Persons.
Further to the above, the release, publication or distribution
of this announcement in other jurisdictions may be restricted by
law and therefore any persons who are subject to the laws of any
applicable jurisdiction (including any jurisdiction where local
laws or regulations may result in a significant risk of civil,
regulatory or criminal exposure if information concerning the
Buy-Out Transaction is sent or made available to investors in that
jurisdiction (Restricted Jurisdictions)) should inform themselves
about, and observe, any applicable legal or regulatory
requirements. In particular, the ability of persons who are
resident in such other jurisdictions or who are subject to the laws
of another jurisdiction to participate in the Buy-Out Transaction
may be affected by the laws of the relevant jurisdictions in which
they are located or to which they are subject. Any failure to
comply with applicable legal or regulatory requirements of any
jurisdiction may constitute a violation of securities laws in that
jurisdiction.
Copies of this announcement and any formal documentation
relating to the Buy-Out Transaction are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction or any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related
purported vote in respect of the Buy-Out Transaction (or the
related Schemes).
Certain of the statements in this announcement or (and any
related oral statements) may be considered forward-looking
statements. This announcement (including information
incorporated by reference in this announcement), oral statements
made regarding the Buy-Out Transaction and other information
published by Markel Corporation, MCIM and the Funds contain
statements which are, or may be deemed to be, "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995.
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
projections of the management of Markel Corporation, MCIM and the
Funds about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking
statements. The forward-looking statements contained in this
announcement include statements relating to the expected effects of
the Buy-Out Transaction, the expected timing and scope of the
Buy-Out Transaction and other statements other than historical
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to",
"budget", "projects", "strategy", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Although
Markel Corporation, MCIM and the Funds believe that the
expectations reflected in such forward-looking statements are
reasonable, they can give no assurance that such expectations will
prove to be correct. By their nature, forward-looking statements
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results
and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include,
but are not limited to: the ability to complete the Buy-Out
Transaction; the ability to obtain requisite regulatory and other
required approvals and the satisfaction of other conditions on the
proposed terms and schedule; as future market conditions, changes
in general economic and business conditions, the behavior of other
market participants, the anticipated benefits from the proposed
transaction not being realized as a result of changes in general
economic and market conditions in the countries in which the Funds
operate, weak, volatile or illiquid capital and/or credit markets,
changes in tax rates, interest rate and currency value
fluctuations, the degree of competition in the geographic and
business areas in which the Funds operate and changes in laws or in
supervisory expectations or requirements.
Other unknown or unpredictable factors could cause actual
results to differ materially from those in the forward-looking
statements. Such forward-looking statements should therefore be
construed in the light of such factors. Neither Markel Corporation,
MCIM nor the Funds, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place any reliance on
these forward-looking statements. Other than in accordance with
their legal or regulatory obligations, neither Markel Corporation,
MCIM nor the Funds is under any obligation, and they expressly
disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. This announcement speaks only as of the
date issued.
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