Enstar Group has announced that its wholly-owned subsidiary, Enstar Australia Holdings, has entered into a definitive agreement for the purchase of AMP's Australian-based closed reinsurance and general insurance operations, for a purchase price of A$585 million.
The operations acquired comprise primarily Gordian RunOff, TGI Australia and AMPG, all of which had been placed into run-off between 1999 and 2002, and AMP’s manager of these businesses, Cobalt Solutions Australia.
The purchase price of A$585 million, which will be reduced by any pre-closing distributions paid by Gordian to AMP, is expected to be financed by approximately 70% from a major Australian bank, approximately 7.5% from J C Flowers II and approximately 22.5% from available cash on hand.
The transaction is expected to close in the first quarter of 2008. Completion of the transaction is conditioned on approval by the Australian regulatory authorities and satisfaction of various customary closing conditions.