After a successful year in 2013 with no significant insured losses and with 2014’s investments already made, CATCo is proposing to distribute the 20 cents per share it earned last year to shareholders. This distribution comes in addition to CATCo’s annual LIBOR +5% distribution (expected to be declared on 6 January 2014).
The mechanism for achieving the distribution is fairly complicated – basically it involves distributing “B” shares to holders of the ordinary shares, subdividing and consolidating the ordinary shares to maintain the same NAV per share post the distribution and allowing B shareholders to opt for a cash distribution (taken in the form of income or as a capital repayment) or reinvestment into ordinary shares but this reinvestment is capped at $25m.