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Reinsurer Shareholders OK Private Equity Firm Role

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NU Online News Service, April 13, 2005, 4:59 p.m. EDT

Investors have voted to permit Cypress Group L.L.C., New York, to own up to 24.9% of the common shares of Scottish Re Group Ltd.[@@]

Scottish Re, a Hamilton, Bermuda, reinsurer, is using $180 million in financing from Cypress, a private equity firm, to support a U.S. individual life reinsurance business acquired from ING Groep N.V., Amsterdam, in 2004.

Cypress, a private equity firm, received 9.9% of Scottish Re’s ordinary common stock in exchange for its investment.

Cypress also received Class C warrants that could increase its ownership stake to 20.48% of Scott Re’s ordinary shares and about $41 million in 7% convertible junior subordinated notes.

Scottish Re shareholders gave Cypress permission to proceed with the deal by approving one amendment to Scottish Re’s articles of association that will convert the Cypress notes into warrants and another amendment that will convert the warrants into ordinary stock once regulators in Delaware and the United Kingdom approve the conversion, Scottish Re says.

Scottish Re reported in January that Cypress is now its largest shareholder.

Cypress has added 1 voting director and 1 non-voting observer to the Scottish Re board.