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October 01, 2007 at 05:55 AM
Officials at the U.S. Securities and Exchange Commission want a Bermuda reinsurer to change the way it accounts for the effects of a conversion of convertible preferred shares.
The SEC sent the company, Scottish Re Group Ltd., Hamilton, Bermuda, a letter stating that the company should have deducted about $121 million attributable to the May 7 conversion when calculating net loss available to ordinary shareholders for the purposes of earnings per share, according to Scottish Re.
The change would have no effect on net income figures for the first half of the year or on the total shareholders’ equity figure reported for June 30, Scottish Re says.
But making this accounting change would result in “a reduction in basic income per ordinary share of $1.46 to a basic loss per ordinary share of [30 cents] for the three months ended June 30, 2007,” Scottish Re says.
