Travelers said a subsidiary has agreed to sell Unionamerica Holdings Limited to a subsidiary of Bermuda-based Enstar Group Limited for a purchase price of $343.4 million.
Enstar acquires and manages insurance and reinsurance companies in runoff and provides management, consultancy and other services to the insurance and reinsurance industry.
St. Paul Fire and Marine Insurance Company, a wholly-owned Travelers subsidiary, has agreed to sell Unionamerica to Royston Run-Off Limited, Travelers said.
Unionamerica includes Travelers' UK-based London Company Market runoff direct insurance and reinsurance businesses, including North American casualty, asbestos and environmental reserves, UK and EU motor reserves, and other casualty reserves, according to Travelers.
The businesses have gross liabilities, as of June 30, of approximately $1 billion, Travelers said.
The company said it expects to record an immaterial gain in connection with the transaction in the fourth quarter of 2008.
Enstar said Royston Run-Off Limited has entered into an agreement with National Australia Bank limited for a $184.6 million loan to help pay the purchase price. The rest will be paid by available cash on hand and a private investment fund.
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