Under the terms of the agreement, RCHI will repurchase 4,755,000 of its shares from XL for a price per share equal to the lesser of (a) 85 percent of the average closing price per share of RCHI's shares during the 20 trading days beginning on January 21, 2000 (the "20-Day Trading Period") and (b) $15.00. The maximum consideration XL could receive from the transaction is $71.325 million. The consideration payable to XL comprises (i) all of RCHI's interests in Latin American Re, valued at approximately book value of $25 million, (ii) RCHI's 1,418,440 shares of ALRE for a price per share equal to the average closing price per ALRE share during the 20-Day Trading Period, (iii) RCHI's warrants to acquire 100,000 shares of ALRE at $15.00 per
-more-
share until January 15, 2008, which will be valued on a Black-Scholes basis, and (iv) cash, if any. XL also has the right to reduce the number of ALRE shares that it would otherwise receive from RCHI to avoid making a cash payment to RCHI should the value of XL's shares of RCHI prove to be lower than the aggregate consideration to be received from RCHI.
XL, through its wholly-owned subsidiaries, including XL Insurance Ltd, XL Mid Ocean Reinsurance Ltd, XL Capital Products Ltd, The Brockbank Group plc and NAC Re Corp., provides insurance and reinsurance coverages and financial products worldwide. As of September 30, 1999, XL had consolidated assets of approximately $14.1 billion and consolidated shareholders equity of approximately $5.4 billion. Additional information is available on the XL web site: www.xl-capital.com.
This press release may contain forward-looking statements which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about our beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. In particular, the transactions described above may not close due to the failure to obtain requisite regulatory approvals or to satisfy all conditions to closing and the ultimate consideration received by XL may be less than the maximum consideration available under the terms of the transaction. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.