R&Q Insurance Holdings faces significant challenges as the insurer struggles to get the proposed sale of its software management business approved across the finish line.

In an update, R&Q noted: “A period of extensive discussion with lenders, regulators and other stakeholders (both before and after the closing agreement was signed) resulted in the company incurring significant additional unexpected costs and expenses (either on its own account, on behalf of or due to the requirements of other stakeholders) .

“In addition, as announced on December 22, 2023, the Company has been constrained since that time with respect to its ability to complete external legacy transactions. These factors, in addition to further adverse reserve development and a degree of general pressure on the Company’s business during this period, It had a material impact on the stability of the Company as a business and as a going concern.

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With both camps keen to finalize the pending deal, R&Q revealed that recent discussions with approved buyers have led to Onex presenting an alternative transaction structure or proposal that could be implemented if the original terms of sale are not met.

R&Q stated: “The Board is currently exploring and evaluating all options that may be available for the company, including alternative transactions (including the alternative proposal) and potential sources of liquidity, while continuing to work to complete the original sale.

“Shareholders should note that implementation of the alternative proposal would involve the parent company, R&Q Insurance Holdings Ltd., filing for provisional liquidation in Bermuda and then completing the sale of Accredited to Onex through that process. The provisional liquidators will then look to realize value from the group’s remaining assets.”

In the event of a provisional liquidation, R&Q will request the immediate suspension of trading in its ordinary shares. It was noted that if the transaction did not proceed in accordance with its original terms and net cash proceeds were not available to facilitate the deleveraging of R&Q, the Company would not be able to repay its debt facilities when they fall due and would therefore not be able to repay them. Be unable to continue as a going concern.

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