UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 28, 2008
Enstar Group Limited
(Exact name of registrant as specified in its charter)
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| Bermuda
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001-33289
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N/A |
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(State or other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
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| P.O. Box HM 2267, |
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| Windsor Place, 3rd Floor, 18 Queen Street |
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| Hamilton HM JX Bermuda
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N/A |
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| (Address of Principal Executive Offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (441) 292-3645
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 2.01. |
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Completion of Acquisition or Disposition of Assets. |
On March 5, 2008, Enstar Group Limited (the “Company”) and its subsidiary, Enstar Australia
Holdings Pty Limited (“Enstar Australia”), completed the previously announced acquisition of AMP
Limited’s (“AMP”) Australian-based closed reinsurance and insurance operations (the “Gordian
Acquisition”). Enstar Australia is a wholly owned subsidiary of Cumberland Holdings Limited
(“Cumberland”), of which the Company owns 70% and J.C. Flowers II, L.P. (the “Flowers Fund”) owns
30% through a non-voting equity interest.
The net purchase price was approximately AUS$440 million (approximately $417 million) and was
financed by AUS$301 million (approximately $285 million) from bank financing, as further described
below under Item 2.03; approximately AUS$42 million (approximately $40 million) from the Flowers
Fund, by way of its 30% non-voting equity interest in Cumberland; and approximately AUS$97 million
(approximately $92 million) from available cash on hand.
The entities affiliated with AMP that are parties to the agreement were AMP Insurance
Investment Holdings Pty Limited, AMP Holdings Limited, AMP Group Services Limited, AMP Group
Holdings Limited and AMP Services Limited.
The Flowers Fund is a private investment fund for which JCF Associates II L.P. is the general
partner and J.C. Flowers & Co. LLC is the investment advisor. JCF Associates II L.P. and J.C.
Flowers & Co. LLC are controlled by J. Christopher Flowers, a director and one of the Company’s
largest shareholders. In addition, John J. Oros, a director and the Company’s Executive Chairman,
is a Managing Director of J.C. Flowers & Co. LLC.
A copy of the Share Sale Agreement, dated December 10, 2007, is incorporated by reference as
Exhibit 2.1 hereto.
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| Item 2.03. |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
On February 28, 2008, Cumberland and Enstar Australia entered into an Agreement with National
Australia Bank Limited and HSH Nordbank AG, London Branch. The Agreement provides for a
multicurrency term loan facility pursuant to which Cumberland is permitted to borrow up to an
aggregate of AUS$301 million (approximately $285 million). On March 4, 2008, Cumberland borrowed
the full amount available under the facility to partially finance the Gordian Acquisition discussed
above under Item 2.01. Of that amount, Cumberland borrowed AUS$215 million (approximately $204
million) under Facility A and AUS$86 million (approximately $81 million) under Facility B.
The loans are secured by a lien on the shares of the acquired companies. The interest rate on
the Facility A portion is LIBOR plus 2.0%, payable semi-annually. The interest rate on the
Facility B portion is LIBOR plus 2.75%, payable semi-annually. The current blended rate on the full
amount borrowed is LIBOR plus 2.2%. During the existence of a payment default, the interest rate
will be increased by 1.0%. During the existence of any event of default (as specified in the
Agreement), the lenders under the facilities may declare that all amounts outstanding under the
Agreement are immediately due and payable, declare that all borrowed amounts be paid upon demand,
or proceed against the security. The Facility A portion is repayable within five years from the
date of the Agreement. The Facility B portion is repayable within six years from the date of the
Agreement.