R&Q enters into lock-up agreement related to Accredited sale

R&Q Insurance Holdings has announced that it has entered into a lock-up agreement with several parties relating to debt restructuring and a number of other issues, as it seeks their approval to sell Accredited to Onex Corporation’s Onex Partners, in a deal that the company hopes to complete this quarter.

In October 2023, R&Q said that it had entered into a conditional agreement to sell the program management business to Onex Corporation.

The sale was then approved in January 2024 by R&Q shareholders, which was then expected to finish in the first half of 2024.

From what we understand, under the terms of the lock-up agreement, the parties involved have committed not to pursue any enforcement actions regarding R&Q’s financial obligations, pending the finalisation of the restructuring and sale.

“The Board of R&Q believes that the terms of the Lock-Up Agreement provide R&Q with a stable platform on which the Restructuring can be implemented,” R&Q said.

The company has also confirmed that it will remain in close dialogue with its lending banks, providers of credit, and other financing providers as it seeks to finalise the required documentation.

In addition, R&Q has also successfully obtained necessary regulatory approvals from the Malta Financial Services Authority, the Arizona Department of Insurance and the Florida Office of Insurance Regulation and merger clearance from the EU Commission.

R&Q hopes the remaining required approvals will be received shortly.

An important part to highlight however, is that despite initial projections, the available net cash proceeds from the sale are now estimated between $65 million and $110 million, a substantial decrease from earlier estimates due to unforeseen costs and certain constraints.

Upon closing, the funds reportedly will be directed towards reducing the R&Q’s leverage while maintaining operational liquidity.

R&Q also confirmed that it continues to engage actively with Onex to ensure the sale’s progress.

The Board of R&Q is also continuing to evaluate any and all options to realise value from its legacy insurance business for the benefit of all its stakeholders, including its shareholders, whether that be through the ongoing trading of that business or through alternative strategic options.

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