Ensurance Limited has announced it has signed an agreement to "dispose" of its retail brokerage business as part of a $4.1million deal.
The board has entered into a share sale agreement with former directors Stefan Hicks and Brett Graves.
Under the agreement, Ensurance will sell all its shares in Savill Hicks Corp Pty Ltd (SHC) to SHC Insurance Holding Pty Ltd for consideration totalling $4.1 million.
According to the company, the agreement significantly advances its restructuring plans previously announced on 8 May 2018.
The sale will result in the full divestment of the company’s retail brokerage arm, which includes the entire brokerage business, assets and management team.
This is a "significant milestone" for the company. Representatives believe the sale will free up management’s time to focus on activities in support of the company’s repositioning. It is expected to drive strong global growth from its business as a Managing General Agent in the UK and Australia.
Cash funds received from the disposal of the retail brokerage business will be used to build out the company’s UK and Australian based operations, hire additional underwriting personnel to meet customer demand for its specialised construction-related insurance and to drive sales and marketing activity.
Tony Leibowitz, Chairman of Ensurance comments: “This Agreement is a significant milestone for Ensurance, and a pleasing result for the team after months of negotiation. The disposal of our retail brokerage business delivers a wonderful result for the Company and our shareholders, returning capital that we can now invest in pursuing our recently announced strategy.”
The $4.1m comprises $2.2m in cash, the buyback of 30,140,905 fully paid ordinary shares in ENA, assumption of SHC employee entitlements by SHC Insurance Holding Pty Ltd and the cancellation of convertible notes held by related parties of Stefan Hicks.
If required, vendor financing of up to $1million will be extended under ordinary commercial terms, for a period of 3 months from the day of settlement, with an option to extend.
The sale is subject to a number of conditions precedent including shareholder approval. The transaction covered by the agreement is expected to complete within 2 months.
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