(Bloomberg) ?- Alea Group Holdings Ltd., a Bermuda- based reinsurer, forecast a 2005 after-tax loss of as much as $240 million and may breach an agreement with its lenders after closing to new business because of storm losses and US claims. The shares tumbled 23 percent.

The company may take a charge of at least $95 million in 2005 and has yet to complete an analysis of asbestos and environmental reserves, the Hamilton, Bermuda-based insurer said yesterday in a statement. Alea forecast a 2005 loss after tax of between $200 million and $240 million, or $1.15 and $1.38 a share, the company said.

?Too many risks remain,? said analyst William Hawkins at Keefe, Bruyette & Woods Ltd. in London, who has a ?market perform? rating on the stock and slashed his price target in half to 60 pence a share in an e-mailed note. ?The substantial cut in our price target reflects Alea?s rapidly deteriorating financial circumstances.?

Alea has cut jobs, closed to new clients and boosted reserves for US business written in prior years after its credit rating was cut by A.M. Best in September. Alea is 39 percent owned by the New York-based buyout firm Kohlberg Kravis Roberts & Co., Bloomberg data show. The group?s Bermuda office, which has up to ten staff, is to remain open while the operations are in run off, according to the company. Stuart MacKellar, who heads the Bermuda operation, is leaving to join new Bermuda reinsurer Amlin (see story on this page). His departure has not been announced by Alea, and there is no word on whether his position will be filled.

Best yesterday further cut Alea?s financial strength rating to B (Fair) from B++ (Very Good) and the issuer credit rating to ?bb? from ?bbb?. The outlook for all ratings remains negative, BEst said, adding it had subsequently withdrawn all ratings and has assigned an NR-4 (Company Request) to the Alea Group companies.