Tower Group International Ltd. has sold its 10.7% stake in Canopius Group Ltd. for $69.7 million in order to pay down a $70 million credit facility led by Bank of America N.A., terminating the credit facility, the company said Wednesday.
Additionally, the troubled Hamilton, Bermuda-based reinsurer, which late last month reported a second-quarter loss of $507.3 million owing to troubles in its North American operations, said it would further strengthen loss reserves for the third quarter and would file third-quarter results by the end of 2013, the company said late Tuesday in a statement.
Tower on Dec. 13 sold its Canopius stake to an investment fund managed by Bregal Capital L.L.P., which on Wednesday completed the sale of its holdings in Canopius to Sompo Japan Insurance Inc.
Tower also said in its Wednesday statement that it would strengthen its loss reserves in the third quarter by $75 million to $105 million, primarily in workers' compensation, commercial multiperil liability, other liability and commercial auto liability lines of business, and that it expects its U.S. combined statutory surplus, net of cessions to its Bermuda affiliate, to decrease from $374 million at June 30 to between $315 million and $335 million at Sept. 30.
The company added that it expects to file its statutory financial statements for the third quarter by the end of 2013 after filing second quarter results late as well.
The group's stock had plummeted just over 28% by just before 1 p.m. EST in Nasdaq trading to just $2.82 per share, with a 52-week range of $2.73 to $22.30.