Maiden CEO, CFO retire shares plunge 41%
Maiden Holdings Ltd’s shares plummeted by more than 40 per cent yesterday, after the company announced the imminent retirement of both its CEO and CFO, and the slashing of its quarterly dividend by two-thirds.
The announcements came as the Bermudian-based reinsurer announced a net loss of $5.9 million for the second quarter and operating results that fell far short of analysts’ forecasts.
Art Raschbaum, the company’s long-serving chief executive officer will retire for personal reasons, effective September 1, Maiden stated. His replacement will be Lawrence Metz, Maiden’s general counsel and secretary.
Mr Raschbaum has led Maiden for ten years.
The company added that Karen Schmitt, the chief financial officer, has also decided to retire, but will remain with the company as executive vice-president until March 1, 2019.
The Maiden board has appointed Patrick Haveron as CFO and chief operating officer, effective September 1. Mr Haveron will remain as president of Maiden Bermuda.
Maiden announced an operating loss of $10.7 million, or 13 cents per share, for the second quarter, missing the consensus forecast of a profit of 26 cents per share of analysts tracked by Yahoo Finance.
The company’s board slashed the quarterly dividend on common shares from 15 cents per share to five cents.
In a statement, Maiden said: “The company’s board determined that this distribution should be commensurate with the current earnings power of the business and as the company continues to undertake and implement its strategic review, it expects to revisit the common stock dividend in the context of the steps taken to increase shareholder value.”
The company’s combined ratio was 106 per cent, indicating an underwriting loss.
Gross premiums written fell by $51 million to $654.2 million, mostly as the company wrote less business in its AmTrust segment, particularly in its workers’ compensation line of business.
Net investment income rose by 9.4 per cent to $44.3 million. But the company also recognised unrealised losses of $49.7 million in its fixed-income investment portfolio.
The company said its book value per share was $7.71 on June 30, compared to $9.25 at the end of last year.
Maiden added that a strategic review of its operations was ongoing and that it was evaluating a “broad range of options”.
Maiden’s earnings announcement came before stock markets opened yesterday and the company’s shares fell $3.10, or 41.3 per cent in Nasdaq Stock Exchange trading.