Bermuda-based specialty insurance and reinsurance provider Quanta Capital Holdings Ltd. has signed an agreement to divest all of its interests at Lloyd's to Lloyd's insurance underwriters Chaucer Holdings Plc.

Quanta's subsidiary Quanta 4000 Holding Company Ltd. will get back the approximately $116 million deposited with the Society at Lloyd's following the closure of the deal, the company noted.

The deposit with Lloyd's, known as "Funds at Lloyd's," is not distributable to Quanta Capital Holdings without the Bermuda Monetary Authority's approval, the company added.

Quanta stated that its interests at Lloyd's include a 15 percent stake in Pembroke JV Ltd. and 100 percent of Quanta 4000 Ltd., which it was carrying at a net asset value of about $107 million at September 30, 2007.

The company noted that upon completion, as well as taking into account transaction costs and other adjustments, the sale would represent receipt of 107 percent of net asset value as of September 30.

Upon completion of the transaction, which is expected in the very near future, the Bermuda holding company will consist only of run-off operations.

Commenting on the sale, James Ritchie, chairman, said, "Last year, we announced the formation of Pembroke as a means of stabilising Quanta's underwriting operations in Lloyd's, thereby preserving the value of our investment in Syndicate 4000.

"The success of that initiative is apparent in today's announcement; upon closing, we will have successfully secured the earlier-than-expected release of our Funds at Lloyd's and completed the sale of our interests at a respectable premium above net asset value."

Quanta closed down 1.64 percent in trading on the Nasdaq on Friday, at $2.99.

Quanta went into run-off in 2006 - excluding its lines of business done through Lloyd's Syndicate 4000 - after the company's rating dropped below the A range after a downgrading by AM Best.

That followed Quanta's announcement in January 2006 that it had understated its net losses related to a ruptured oil pipeline in California by $4.9 million.

The company was already dealing with around $50 million of losses from the 2004 hurricane season, followed by further heavy catastrophe losses in 2005.