Rosemont Re?s UK parent company Goshawk Insurance Holdings Plc fell 42 percent in trading yesterday after the company said returns to shareholders may be delayed because Bermuda?s regulator intends to restrict Rosemont?s licence.

Shares of the reinsurer, which closed to new business last month, sank four pence to 5.5 pence in London, giving the company a market value of $18 million and increasing this year?s losses to 86 percent.

The Bermuda Monetary Authority intends to restrict the Class 4 insurance licence held by Rosemont Re, Goshawk?s Bermudian operation, which is now in run off, according to a statement from Goshawk.

?The impact of this restriction will be that any future distributions by Rosemont Re to its parent company will require the BMA?s approval before such distributions could be made. This may delay the timing of any return to the Company?s shareholders.

?As stated previously, there can be no certainty as to either the value or timing of payments to the Company?s shareholders in run off,? the company said.

Goshawk also reported that the Group ?has now breached certain of its banking covenants. The Board is working closely with its lenders in order to resolve the position going forward.?

Goshawk continues to be dependent on the remittance of funds from Rosemont Re for its ongoing financial requirements, as has been the case since the Group?s London operations were closed down approximately two years ago.

The approval of the BMA as well as the Group?s banks is required for the ongoing remittance of funds to take place, restricting the Company?s ongoing working capital position, the company said.

Goshawk announced last month that it would sell parts of its Rosemont Re unit for $2.5 million to a group of private investors led by Don Kramer, former vice chairman of Ace Ltd.