R&Q Insurance Holdings, which is selling its program management business Accredited to Onex Corporation’s Onex Partners, has disclosed developments regarding lender approvals and the financial restructuring linked to the sale.
According to R&Q’s update, the company secured a lock-up agreement with several parties on Wednesday. The agreement outlines a plan for restructuring certain debts within R&Q, with terms allowing the parties to consent to the sale as needed.
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 finalization 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,” said R&Q, which will remain in close dialogue with its lending banks, providers of credit, and other financing providers as it seeks to finalize the required documentation.
In addition to securing lender support, R&Q successfully obtained necessary regulatory approvals from the Malta Financial Services Authority, the Arizona Department of Insurance, the Florida Office of Insurance Regulation, and the European Commission. The company is optimistic about receiving the remaining nods still pending.
Meanwhile, despite initial projections, the available net cash proceeds from the sale are now estimated between $65 million and $110 million, significantly reduced from earlier estimates due to unforeseen costs and certain constraints.
Upon closing, the funds will be directed towards reducing the R&Q’s leverage while maintaining operational liquidity. R&Q also continues to engage actively with Onex to ensure the sale’s progress, targeting a closing in the second quarter of 2024.
As for its legacy insurance business, R&Q said its board continues to evaluate all options to realize value, including ongoing trading.
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