Tower Group International Ltd., the insurer that agreed to be bought by ACP Re Ltd. amid a stock plunge, hired Greenhill & Co. to provide advice on repaying debt if the takeover collapses.
Tower hired the bank as the Massachusetts Department of Insurance demanded a preliminary operations plan by June 1, the Bermuda-based insurer said Thursday in a regulatory filing.
“The plan must include detailed information describing the steps the company is taking to enable it to repay its convertible senior debt holders and continue operations as a going concern in the event its pending merger with ACP Re Ltd. does not occur,” Tower said in the filing. The $150 million of 5 percent notes are due in September.
Tower has declined 34 percent—this after plunging 78 percent in 2013 as the company said it needed to add to reserves for claims on policies, including workers compensation and commercial auto coverage. The regulator’s agreement with Tower’s Massachusetts Homeland Insurance Co. won’t have a material impact on the business’s ability to write new coverage, the company said in the filing.
ACP Re is owned by a trust established by AmTrust Financial Services Inc.’s founder, according to a statement in January when the deal was announced. That agreement called for buying Tower for $3 a share, and was revised to $2.50. Tower closed at $2.23 today in New York.
Greenhill is a New York-based takeover adviser founded by Robert F. Greenhill.