Maiden Holdings has sold its US reinsurance unit to a subsidiary of fellow Bermudian company Enstar Group.

Maiden will receive net proceeds of $307.5 million for its Missouri-based subsidiary Maiden Reinsurance North America.

Enstar will operate the business in run-off. On Wednesday, Maiden announced it had sold the business’s reinsurance renewal rights to Transatlantic Re, which was also taking on the unit’s underwriting team.

“Today’s announcement of the sale of MRNA represents another step in our continuing strategic review. This transaction will broaden our ability to manage and allocate capital as we move forward, and will create value for our shareholders,” Lawrence Metz, Maiden’s chief executive officer designate, said.

The transaction is expected to close in the fourth quarter of this year.

Enstar will assume approximately $1.3 billion of net loss and loss adjustment expense reserves and unearned premium reserves from Maiden’s US Diversified business upon closing.

As part of the transaction, an Enstar subsidiary will novate and assume certain reinsurance agreements from Maiden’s Bermuda reinsurer, including certain reinsurance agreements with MRNA.

Patrick Haveron, Maiden’s chief financial officer and chief operating officer designate, said: “Today’s announcement along with our previously announced renewal rights transaction will further enhance our capital position.

“We are moving immediately to improve profitability by implementing additional operational efficiencies and expense reductions through the end of 2018, and we expect to provide further updates as we move forward.”

Maiden’s shares were trading down 1.3 per cent at $3.90 at 2.51pm Bermuda time time today, while Enstar’s shares were down 0.7 per cent at $212.25.