On 19 November, Middlesea Insurance plc issued its Interim Directors’ Statement explaining that during the third quarter of 2009, Progress Assicurazioni SpA (the Italian subsidiary) continued to report material negative results including an exceptional incidence of late reported claims which negatively impacted the Middlesea Group’s results. The Directors also reported that the Italian subsidiary has now concluded all the necessary reinsurance agreements with respect to the losses incurred in the motor liability insurance underwritten by Progress between 2001 and 2008.
Middlesea again confirmed that the extensive losses suffered by Progress in recent months placed an unprecedented strain on the capital resources of the Middlesea Group. As a result, subject to all necessary approvals, the Company will be issuing 67 million new shares at a price of €0.60 per share. Shareholders will be entitled to subscribe to 2.68 shares for every 1 held (rounded up or down to the nearest share). This rights issue is one of the resolutions to be put forward for approval by shareholders during an Extraordinary General Meeting to be held on Friday 20 November. Further details on Rights Issue available here.
On a more positive note, the Directors stated that the local operations of the Middlesea Group have reported encouraging positive results for the three months ended 30 September 2009. This was mainly due to the signs of recovery in both the global economy as well as across local and international financial markets. However the sustainability of the economic recovery and the volatility in the financial markets are being closely monitored by the Directors.