Bermudian-based James River Group Holdings Ltd is to redomicile to the United States next year, the company has announced.

The news came as James River reported a third quarter net loss from continuing operations available to common shareholders of $40.7 million, which compares with net income of $21.1 million in the prior year quarter.

The company said it is commencing a multipronged strategic partnership with Bermudian-based Enstar Group Ltd under which:

• Cavello Bay Reinsurance Ltd, a wholly-owned subsidiary of Enstar, has agreed to purchase $12.5 million of newly issued common shares at a per share price of $6.40 (subject to certain closing conditions), in addition to 637,640 common shares it already owns through purchases in the open market; and

• Subsidiaries of the company have entered into an adverse development reinsurance agreement with Cavello Bay, directly above the existing E&S ADC, with a limit of $75 million and no co-participation; and

• Enstar will also have an informal consulting relationship and best practices dialogue with the company’s claims leadership.

James River also amended the convertible preferred shares held by Gallatin Point Capital LLC to convert $37.5 million liquidation preference of the outstanding preferred shares to common shares at a per share price of $6.40.

It added that the quarterly preferred dividend of the remaining $112.5 million liquidation preference will remain at 7 per cent for five years subsequent to September 30, 2024 and will be capped at 8 per cent thereafter. In addition, the voluntary and mandatory conversion prices of the remaining $112.5 million of outstanding preferred shares were amended to increase the conversion premiums to 130 per cent and 200 per cent of the new conversion price of $6.40 per share, respectively.

James River said: “Through these actions, alongside the reduction to the company’s quarterly common dividend, the company will meaningfully reduce its fixed charges given the opportunity it has to put capital to work at attractive returns, in its E&S segment especially.

“The company intends to pursue a plan to redomicile to the United States during 2025 and expects to reduce its effective tax rate closer to the US statutory rate thereafter.”

Frank D'Orazio, chief executive, said: “With the strategic actions we are announcing, notably the addition of Enstar as both a significant shareholder and strategic partner and the continued commitment of Gallatin Point, our highly regarded E&S franchise is significantly de-risked and well positioned to take advantage of strong market support amid a robust E&S environment.

“Momentum in our Core E&S franchise has continued to build each quarter during 2024 as we continue to balance attractive market conditions with underwriting discipline.”

David Ni, chief strategy officer of Enstar Group, said: “In conjunction with these transactions, Enstar has had the opportunity to become well-versed with the company’s business and we are pleased to make a $12.5 million common equity investment, underscoring our support of James River and its E&S franchise.“