GoshawK to sell Rosemont Re

GoshawK has agreed to sell Rosemont Re to a consortium of private equity investors headed by Don Kramer, the former vice chair of ACE Ltd.GoshawK and Rosemont Re have agreed to terms with a consortium of private equity investors, who intend to incorporate a new Bermuda reinsurer with capital of not less than $750 million, GoshawK has announced in a press release.The investors intend to pay Rosemont Re a fixed up-front payment of approximately US$2.5 million for its existing infrastructure and 8% commission payments based on the renewing Rosemont Re business once it is bound by the new reinsurer in 2006.There is no certainty as to the amount potentially due under these commission payments, but GoshawK directors anticipate approximately US$4 million to $7 million may become due. There is provision for certain existing Rosemont Re staff to remain available to provide run-off services to Rosemont Re. The transaction will be subject to a number of conditions, including: signing definitive legal documentation; approval of the transaction by GoshawK shareholders; and the investors being able to complete incorporation, capitalisation, licencing and rating of the new reinsurer.”Should the conditions attaching to a transaction not be met, Rosemont Re is unlikely to receive value for its franchise,” GoshawK announced. “Rosemont Re remains exposed to the potential impact of further hurricane activity.”Following completion of the sale, Russell Brooke and Jon Beck will resign as directors of GoshawK and Rosemont Re. As a consequence of recent events, Rosemont Re is now in run off.