REG - Randall & Quilter Ld - Result of Special General Meeting

R&Q Insurance HoldingsAnnouncement

25/05/2022 18:15

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RNS Number : 8376M  Randall & Quilter Inv Hldgs Ltd  25 May 2022

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AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION
PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

LEI: 213800G4W18GWKTR9X51

 

25 May 2022

 

Result of Special General Meeting

Proposed $100 million Placing and Open Offer of up to $8 million

 

Further to the announcement at 8.04 a.m. this morning, Randall & Quilter
Investment Holdings Ltd. (AIM:RQIH) (the "Company", and together with its
subsidiary undertakings "R&Q"), the leading non-life global specialty
insurance company, today held the reconvened Special General Meeting ("SGM")
referred to in the notice to shareholders of the Company dated 27 April 2022
and which had been adjourned on 20 May 2022.

Following a poll conducted at the meeting, resolutions 1, 2 and 3 as set out
in the notice convening the SGM have not been approved by shareholders. The
results of all resolutions put to the SGM are in the appendix below.

The passing of resolutions 1, 2 and 3 was a condition to completion of the
cash acquisition of the entire issued share capital of the Company by Brickell
PC Insurance Holdings LLC ("Brickell") and Brickell's commitment to provide
$100 million new equity funding to the Company (the "Transaction").

As the Transaction will not proceed, the Company is now focussed on raising
approximately $100 million via a Placing and up to $8 million via an Open
Offer (the "Fundraise").

The vote against the resolutions required to complete the Transaction
demonstrates the confidence of certain of the Company's shareholders in the
future value and prospects of the business and support for an equity raise.
Following a short market sounding process, certain existing shareholders have
indicated strong interest to subscribe for in excess of $100 million in the
Fundraise.

William Spiegel, Executive Chairman of R&Q, said:

 

"Following the outcome of today's vote, we will turn our focus to the
fundraise. Having prepared for this as an option when we originally engaged
with shareholders, we are well placed to launch this shortly. Throughout this
process our priority has always been delivering the best outcome for
shareholders and the outcome of the vote has demonstrated the long-term value
that investors see in the business. We continue to have great confidence in
the future prospects for R&Q, and expect in excess of $90 million in
pre-tax operating profit in 2024. We look forward to engaging with our
shareholders on the fundraise."

 

Alastair Campbell, Non-Executive Director and Senior Independent Director of
R&Q, commenting on behalf of the Board said:

 

"Following further engagement with our shareholders our priority now is to
secure the funding needed to de-lever our balance sheet and improve our
financial profile. Since becoming Executive Chairman just over twelve months
ago, William, alongside his new management team, have outlined a compelling
new strategy and driven significant positive change at R&Q, enhancing its
culture, risk management and governance. We look forward to engaging with our
shareholders as we proceed with the fundraise."

 

Trading Update and Outlook

 

R&Q anticipates achieving in excess of $90 million pre-tax operating
profit in 2024. This is due to significant operating leverage as the business
achieves scale, which R&Q believes is underpinned by the ongoing growth in
its Program Management business and the ability to deploy Gibson Re's capital
to support its Legacy Insurance business.

 

The Company continues its transformational journey to becoming primarily a
recurring fee-based business by 2024. Gibson Re has capacity to assume $1.6
billion of reserves over a three-year underwriting period, of which just over
$400 million was assumed at year-end 2021. The timing of legacy transactions
continues to be episodic with a heavy weighting towards Q4. To date, a small
number of legacy transactions have completed and we have a strong pipeline of
activity similar to last year, and expect to realise an annual recurring fee
income of 4.25% of reserves which are under management. As the business
transitions to a recurring fee generating business, the timing of legacy
transactions will impact short term profitability. However, the focus of
management is on the deployment of Gibson Re's capital and growth in reserves
under management that will generate significant recurring fee income in the
future.

 

Program Management continues to grow and R&Q expects to achieve $1.75
billion of gross written premium in 2022.  Program Management earns fee
income of approximately 5% of the written premium ceded to reinsurers. Program
Management also includes R&Q's 40% share in the profits of Tradesman
Program Managers.

 

Approach to Fundraise

The Fundraise is expected to comprise a non-underwritten firm and conditional
non pre-emptive placing of shares to institutional shareholders (the
"Placing") and an open offer to existing qualifying shareholders (the "Open
Offer").

The Placing is expected to be launched on or around 13 June 2022 following the
release of R&Q's results for the year ended 31 December 2021. The Company
is expecting to offer a maximum of 10% of its issued share capital on a firm
basis (the "Firm Placing") with additional ordinary shares being offered
conditional upon shareholder approval at a special general meeting of the
Company expected to take place on or around 11 July 2022 (the "Conditional
Placing").  Ordinary shares placed with investors in the Firm Placing and the
Conditional Placing are expected to be issued and admitted to trading on AIM
on or around 15 June 2022 and 12 July 2022, respectively.

In addition, in order to provide a wider group of shareholders with the
opportunity to participate in the Fundraise, qualifying shareholders are
expected to be provided with the opportunity to subscribe for ordinary shares
in the Open Offer at the same offer price as the Placing for up to an
aggregate value of $8 million (and no more than €8m(1)). The Open Offer is
expected to be launched on or around 15 June 2022, with the results being
published on or around 8 July 2022 and the ordinary shares taken up in the
Open Offer being issued and admitted to trading on AIM on or around 12 July
2022.

(1) Under the Prospectus Regulation Rules, the UK threshold below which public
offers are exempt

Use of Proceeds

$60 million will be used to fund collateral requirements and the balance to
pay down debt.

R&Q had received pre-emptive waivers from its bank lenders on its existing
financial covenants until the earlier of completion of an equity raise or 29
June 2022. R&Q is in discussions with its lending banks to extend the
waivers.

Further announcements will be made in due course.

 

Expected Timetable of Events(2)

 

 Publish Results                                                13 June 2022
 Bookbuild Commences                                            13 June 2022
 Announce Result of the Bookbuild                               14 June 2022
 Firm Placing Admission & Settlement                            15 June 2022
 Post Circular and Notice of General Meeting                    17 June 2022
 Announce Result of Open Offer                                  8 July 2022
 General Meeting                                                11 July 2022
 Conditional Placing and Open Offer Admission & Settlement      12 July 2022

 

(2) Dates are anticipated dates that are subject to change. Confirmation of
the timetable will be given in due course.

 

 Enquiries

 R&Q                                                                                                                                      Tel: +44 (0) 207 780 5850

 William Spiegel

 Alan Quilter

 Tom Solomon

 Numis (Nominated Advisor and Joint Financial Advisor)                                                                                    Tel: +44 (0)20 7260 1000

 Charles Farquhar

 Giles Rolls

 Barclays (Joint Financial Advisor)                                                                                                       Tel: +44 (0)20 7623 2323

 Nishant Amin

 Chris Madderson

 FTI Consulting (Financial PR for R&Q)                                                                                                    Tel +44 (0)7747 113919

 Tom Blackwell

 

 

APPENDIX

 

Result of SGM

 Resolution  Description                                                                 For          %      Against     %      Withheld
 1           To approve the Acquisition and to approve and adopt the statutory merger    175,579,430  74.26  60,857,895  25.74  10,225,000
             agreement
 2           To approve and adopt the bye-laws                                           175,579,430  74.26  60,857,895  25.74  10,225,000
 3           To approve the cancellation of the admission to trading on AIM              175,579,430  74.26  60,857,895  25.74  10,225,000
 4           To authorise the directors to allot Ordinary Shares in connection with the  175,574,320  83.99  33,458,483  16.01  37,629,522
             R&Q PS Investment
 5           To empower the directors to allot Ordinary Shares in connection with the    175,579,430  84.00  33,453,373  16.00  37,629,522
             R&Q PS Investment as if bye-law 50 did not apply

 

 

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This Announcement does not constitute a recommendation concerning any
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indication in this Announcement of the price at which ordinary shares have
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to be construed as legal, business, financial or tax advice. Each investor or
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All offers of the shares pursuant to the possible Fundraise will be made
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"EU Prospectus Regulation") or the EU Prospectus Regulation as it forms part
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indicated herein.

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