The global expansion of Bermuda-based Flagstone Reinsurance Holdings Ltd. continued yesterday when the 'Class of 2005' reinsurer agreed to buy a stake of up to 29.9 percent in Cyprus-based Alliance International Reinsurance Public Company Ltd.

The transaction, subject to regulatory approvals, satisfactory due diligence and closing conditions, is expected to close in the current quarter.

Alliance Re, which is publicly traded on the Cyprus Stock Exchange, is a specialist property and casualty reinsurer writing multiple lines of business in Europe, Asia, and the Middle East and North Africa regions.

In a statement yesterday, Flagstone said it may provide technical support in the form of modelling and actuarial resources and a quota share arrangement in order to further assist in the growth and development of the company.

In addition, Flagstone is expected to provide two directors to Alliance Re.

Flagstone already has a presence in the Middle East, having opened an office at the Dubai International Financial Centre last September.

Last month, the company bought a controlling interest in South African insurer Imperial Reinsurance. It also has operations in London, Puerto Rico, India and Halifax, Nova Scotia.

A post-Katrina start-up company that began operations in December 2005, Flagstone has chosen to spread its net wider than North America as it hunts for new business in growing economies. The company employs nearly 40 staff in Bermuda, out of a total global workforce of 250.