UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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[ ] Soliciting Material Pursuant to ss. 240.14a-12
SCOTTISH RE GROUP LIMITED
-------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
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[LOGO]
*** URGENT ATTENTION REQUESTED ***
Dear Fellow Shareholder,
You should have previously received proxy material in connection with the
upcoming Extraordinary General Meeting of Shareholders of Scottish Re Group
Limited, now to be held on March 2, 2007 at the Fairmont Hamilton Princess Hotel
in Hamilton, Bermuda at 11:00 A.M. local time. The shareholders' meeting is now
less than five days away.
At this important meeting, you will be asked to vote on a set of proposals
relating to the proposed investment in Scottish Re by MassMutual Capital
Partners LLC ("MassMutual Capital"), a member of the MassMutual Financial Group,
and an affiliate of Cerberus Capital Management, L.P. ("Cerberus"), who we refer
to as the "Investors" in the proxy materials. As described in the proxy
statement that was previously mailed to shareholders on or about January 22,
2007 and the proxy supplement that was previously mailed to shareholders on or
about February 20, 2007, before approving this transaction, our board of
directors carefully considered a number of factors, including that an exhaustive
auction process to solicit potential bidders was undertaken and that the
alternatives of run-off and bankruptcy likely would result in significantly less
value to shareholders. Based on these considerations, our board of directors
unanimously recommends that shareholders approve this transaction. Since the
mailing of the first proxy reminder on or about February 6, 2007, Institutional
Shareholder Services and Glass Lewis & Co., both independent proxy advisory
firms, have recommended that Scottish Re shareholders vote "FOR" each of the
proposals described in the proxy materials.
As communicated with shareholders previously, in the event that Scottish Re is
not able to complete the transaction with the Investors, including as a result
of a failure to obtain the required shareholder approvals, our liquidity
position, financial condition and our business would be materially adversely
affected. Although we would attempt to enter into an alternative transaction
that would provide us with the liquidity and capital needed to manage our
business, we cannot assure you that we would succeed in entering into such a
transaction, and based upon the process described in the proxy statement that we
conducted in evaluating our strategic alternatives, we believe that it is
unlikely that we would be able to obtain a superior offer from someone other
than the Investors or to enter into such a transaction on a timely basis.
In particular, we believe that a failure to complete this transaction would
likely result in:
o further downgrades in our credit ratings and the financial strength
ratings of our operating subsidiaries;
o termination of the amended forbearance agreement with HSBC Bank USA,
N.A. and demands from it for additional collateral pursuant to the
terms of the collateral finance facilities that we entered into with
it in 2004 and December 2005;
o the loss of services of some of our key employees;
o an inability by us to attract new employees with the skills needed to
manage our existing business;
o regulatory action against us under applicable insurance laws; and
o the likelihood of customers terminating or recapturing ceded business.
Moreover, in the event that our shareholders fail to approve the transaction
with the Investors:
o Cerberus would not be required to provide us the $100.0 million term
loan facility agreed to on November 26, 2006 and Citigroup Global
Markets Inc.; and
o Calyon Securities (USA) Inc. would not be required to enter into the
$500.0 million collateral finance facility agreed to on November 26,
2006.
As a consequence of the above, if we were unable to promptly arrange
satisfactory alternative financing, we believe it may become necessary for us to
seek protection from our creditors under applicable bankruptcy and insolvency
laws in the jurisdictions where we and our operating subsidiaries are domiciled,
or one or more of our regulators may seek to intervene in the operations of our
operating company subsidiaries. We believe bankruptcy is likely to provide
significantly less value and certainty to shareholders than the Issuance.
AS SUCH, YOUR BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED EACH OF THE
PROPOSALSAND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSALS.
Regardless of the number of shares you may own, it is important they be
represented at the meeting. If you do not vote, the effect will be a vote
against the transaction. We urge you to please return your proxy card, or vote
by following the instructions for phone or internet voting that appear on your
proxy card.
Thank you for your support. Your prompt voting may save Scottish Re the
necessity and expense of further solicitations.
Sincerely,
/s/ Paul Goldean
Paul Goldean
President and Chief Executive Officer