February 23, 2018 / 8:38 AM / 6 months ago

UPDATE 2-NZ High Court places CBL Insurance in interim liquidation

* CBL insurance is largest division of CBL Corp

* Central banks in NZ, Ireland probing CBL’s French unit

* CBL shares in trading halt since Feb. 5 (Adds CBL statement)

SYDNEY, Feb 23 (Reuters) - New Zealand’s High Court placed insurance firm CBL Insurance Ltd, the main subsidiary of CBL Corporation Ltd, in interim liquidation on Friday after a request from the country’s central bank.

The Reserve Bank of New Zealand regulates the country’s insurance sector and CBL disclosed earlier this month that the bank was reviewing the adequacy of the company’s reserves in its French construction insurance business.

Ireland’s central bank had opened a similar review, the company said earlier in the month, and on Monday it directed CBL’s Irish-registered CBL Insurance Europe subsidiary to stop writing business.

Two partners of insolvency firm McGrath Nicol were appointed as liquidators of CBL Insurance, taking control of all the company’s assets and financial records, New Zealand High Court Justice Patricia Courtney said in her orders.

CBL Corp, in an emailed statement, said the order only applied to CBL Insurance, not the parent company “or any other companies in the group.”

McGrath Nicol could not immediately be reached for comment.

CBL Corp had said on Feb. 5 it would strengthen non-cash reserves for the French business by NZ$100 million ($73 million), prompting a credit downgrade by insurance ratings agency firm A.M. Best.

Last week CBL’s newly hired chief operating officer departed while CBL said it would exit the French business and that “all exit options” were being considered, including a sale.

CBL shares have not traded since the company requested a halt on Feb. 5. The company is due to report half-year results on Feb. 27 and has said it is “working towards a capital raise”. ($1 = 1.3695 New Zealand dollars) (Reporting by Tom Westbrook; Editing by Muralikumar Anantharaman)

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