Old Republic International Corporation’s (ORI) subsidiary, Republic Financial Indemnity Group (RFIG) has sold a 20.6% common equity interest to partial leveraged buyout (LBO) group of investors.
The move comes in line with the Old Republic’s decision to spin-off substantially RFIG all common stock holdings as a taxable dividend in-kind to ORI’s shareholders and to establish it as a separate publicly held company following the spin-off.
In next few days, RFIG’s business and its common shares will be filed with the Securities and Exchange Commission (SEC) in a Registration and Information Statement (Registration Statement).
ORI chairman and chief executive officer AC Zucaro said the events are a natural outcome of its previously announced objective of combining the mortgage guaranty (MI) and consumer credit indemnity (CCI) lines, and separating them from the rest of the firm’s business.
"In the face of this situation, we concluded the best option for recapitalizing the business was through the partial leveraged buyout just consummated, followed by the spin-off to Old Republic’s existing shareholders of substantially all of our stock ownership in RFIG," Zucaro added.
ORI president and as a senior executive of several subsidiaries Christopher Nard said: Restructuring RFIG provides an opportunity to re-establish a viable capital base and recast MI and CCI businesses as reliably sound guarantors of long-term financial commitments.
As soon as the, The Registration Statement will be sent to ORI shareholders of record, following the Registration Statement clears SEC review, and then the freely tradable RFIG common stock will be distributed.