Hurricane-force European windstorm Kyrill and a space satellite that exploded after crashing back onto its floating sea launch platform have left Flagstone Reinsurance with an estimated bill of between $22 million and $38 million in the opening months of 2007.

The two events were unconnected but the Bermuda-based company had insurance exposure to both and expects to pay out between $22 million and $32 million relating January’s windstorm, mostly tied to losses in Germany and the UK, and up to a maximum of $6 million after the Zenit communications satellite rocket exploded on January 30 as it attempted to lift-off from an ocean-going platform in the Pacific.

On a positive note Flagstone’s gross premiums for January — some $180 million — are 150 percent higher than in January, 2006.

Flagstone’s exposure to the winter storm and exploding satellite are revealed in an updated Securities and Exchange Commission filing, which outlines the reinsurer’s plan to sell 13 million shares available in its initial public offering (IPO) with the expectation of raising $159.2 million once expenses and fees have been taken into account.

To fulfil SEC regulations Flagstone Re has listed developments impacting its business such as the aftermath of Kyrill and the Zenit satellite event.

Flagstone’s expectation of raising $159.2 million from its IPO is inline with a previous Securities and Exchange Commission filing, which has just been updated by the 2005 Bermuda start-up.

It is anticipated shares in Flagstone Re will be initially valued between $12.50 and $14.50. The capital raised from the IPO will be used to increase Flagstone’s reinsurance underwriting capacity, according the latest filing.

Lehman Brothers and Citigroup are the lead underwriters for the offering.

Since being formed as a Bermuda-based global reinsurance holding company by Mark Byrne’s Haverford (Bermuda), the reinsurer has raised $850 million through three private placement of common shares and deferrable interest debentures.

Last year the company had $302.5 million in gross premiums, of which $219.1 million related to catastrophe reinsurance. In December the company’s financial strength was rated as “A-” by A.M. Best, the fourth highest rating on a scale of 16.

It has a research and development team in Hyderbad, India, and a computer data centre in Halifax, Canada.

The company has reported that its gross premiums written for January are $180 million.

Flagstone has also revealed that last year it had 10 percent of its net premiums, totally $29 million, connected to Florida-specific programmes, and therefore the company is keeping a close watch on what impact changes to the Florida Hurricane Catastrophe Fund might have on its business in the state.

Flagstone is also building up a separate European underwriting platform in Switzerland, while its international reinsurance marketing is carried out in London.

The underwriters of the Flagstone IPO have the option to buy an additional 1.95 million shares for over-allotments.

Should that option be exercised the net proceeds raised from the offering, assuming shares sell at the expected mid-point of $13.50, will be $183.7 million.