XL and MMA announced on September 7 that they were discussing terms under which XL would increase its 49 percent shareholding in Le Mans Ré, which was formed by XL and MMA in 1999.
The share capital of Le Mans Ré is to be increased before December 31, 2001 by FF 400 million (US$54.9 million) with pro rata capital subscriptions from both shareholders calculated on the basis of their existing shareholding in the joint venture: 51 percent MMA and 49 percent XL.
Jean-Claude Seys, Chief Executive Officer of MMA, said: "Although the impact of the September 11 attacks has been limited for Le Mans Ré, we wanted to provide our subsidiary with financial resources that will put it in a position to respond effectively to the opportunities that are expected to emerge in 2002 as a result of dramatic changes in the worldwide reinsurance scene. We also wanted to provide it with access to increased technical reinsurance underwriting capabilities and we are pleased to have achieved these goals through our close, continuing association with XL."
Henry C.V. Keeling, Chief Executive of Reinsurance Operations for XL and President and Chief Executive Officer of XL Re Ltd, said: "We are delighted to reaffirm our intention to increase our involvement with Le Mans Ré and to help provide it with new capital. Given the current uncertainty in the business world at this time, we hope this initiative serves to underline just how importantly we view our continued strategic commitment to Le Mans Ré, its clients, producers and employees. With today's changed marketplace producing excellent growth opportunities combined with the strong client connections of Le Mans Ré and its access to Continental Europe, we regard this joint venture with MMA as a key element in our global reinsurance strategy. We hope to finalise discussions on our acquisition of a controlling interest in Le Mans Ré before the end of the year."
The transaction remains subject to the satisfaction of certain conditions, including the receipt of regulatory and other approvals, and the execution of definitive documentation. It is anticipated that this transaction would be completed effective January 1, 2002.
Le Mans Ré has approximately 130 staff in Le Mans and maintains offices in Toronto, Singapore, Miami, Paris, Cologne, Madrid, Sydney and Labuan. As at December 31, 2000, Le Mans Re's gross written premiums were FF 1,881 million (US$ 264.2 million). This business included property (facultative and treaty), life and accident, motor and casualty risks. Additional information is available on www.lemansre.com.
Les Mutuelles du Mans Assurances is a French group of mutual insurance companies founded in 1828. It had net assets of FF 9.7 billion and gross written premiums of FF 22.2 billion in 2000, of which FF 5.1 billion was derived from operations outside France. MMA has approximately 4,800 employees and 1,200 sales offices throughout France. Additional information is available on www.mma.fr.
XL Capital Ltd, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies, and other enterprises on a worldwide basis. As at September 30, 2001, XL had consolidated assets of approximately $25.6 billion and consolidated shareholders' equity of approximately $4.8 billion. More information about XL is available on www.xlcapital.com.