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Insurer restates profit after change to SPAC guidance

Posted On: Oct. 15, 2021 1:42 PM CST

financial results

Bermuda-based insurer and reinsurer International General Insurance Holdings Ltd., which went public via a special purpose acquisition company transaction last year, will reduce its 2020 stated profit by $4.4 million due to changes in accounting guidance for SPACs, the company said Friday.

IGI in March reported a $31.6 million profit for 2020.

The restatement was made “as a result of further consideration of a statement issued by the Securities and Exchange Commission on April 12, 2021, with respect to the accounting treatment for warrant instruments issued by (SPACs),” an IGI statement said.

SPAC companies issue public warrants to third-party investors to enhance potential returns during an initial public offering.

The change will also increase the company’s total liabilities by $13.6 million and decrease its total equity by the same amount, as of Dec. 31, 2020, the statement said.

In August, IGI reclassified its private warrants as a derivative liability instead of equity. “After further analysis and discussion with the SEC staff, IGI has determined that the public warrants should also be recorded as a derivative liability,” IGI said.

IGI was formed in 2001 and its operational headquarters is in Amman, Jordan. Listed on the Nasdaq exchange, the company reported gross premiums of $467.3 million in 2020.