GoshawK shares collapse further on cash flow troubles
Shares in UK quoted GoshawK have collapsed almost 40 percent today to 5.75p as the company is no longer able to get access to funds in its Bermudian reinsurance arm Rosemont Re - which became the first industry casualty of this year's storms when it fell into run-off last month.
GoshawK, which also admitted Hurricane Wilma will cost the group between $8mn - $15mn, said it had now breached its banking covenants and had been told by the Bermuda Monetary Authority that Rosemont Re can no longer transfer funds without its permission.
In a statement to the London Stock Exchange, GoshawK said: "The Company continues to be dependent on the remittance of funds from Rosemont Re to the Company 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 Group's banks and, as stated above, the BMA is required for the ongoing remittance of funds to take place, restricting the Company's ongoing working capital position".
GoshawK also became the latest company to reveal the woes of Hurricane Wilma. It noted that the hurricane - which has been estimated to have caused up to $12bn of industry losses - will cost the firm up to $15mn over which its retrocessional cover will apply.
Published on November 3, 2005
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