As part of its strategy to dispose of
non-core assets, Bermuda-registered life reinsurer Scottish Re has
agreed to sell its International Life Reinsurance (ILR) unit to US
insurer Pacific Life’s parent company Pacific LifeCorp for $71.2
million, subject to a potential downward adjustment.

The disposal comes at a time when Scottish Re’s market
capitalisation has slumped to a mere $5.5 million and its
counterparty credit rating slashed to CCC- by rating agency
Standard & Poor’s.

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Scottish Re’s ILR unit, which is to be renamed Pacific Life Re,
provides life and annuity reinsurance in the UK, Ireland and Asia
and has offices in London, Singapore and Japan.

Pacific Life’s chairman, president and CEO Jim Morris termed the
acquisition “a great opportunity” to access the UK and Asian
markets.

He added that he was “very impressed” with the ILR unit’s
seven-strong executive management team which will remain intact.
David Howell, Scottish Re Holdings’ current CEO will become CEO of
Pacific Life Re which will be headquartered in London.

Scottish Re, which has yet to complete its audited financial
statements for the year ended 31 December 2007, has not commented
on the future of its North American business unit. Scottish Re’s
most recent financial statement was for the third quarter of 2007
and reflected quarterly earned premium income of $428.8 million for
the North American unit and $27.5 million for the ILR unit.

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In May 2007 Scottish Re completed

an equity raising exercise in which MassMutual Capital (MMC), a
unit of US insurer MassMutual, and private equity firm Cerberus
Capital Management each invested $300 million in Scottish Re.

This transaction gave MMC and Cerberus a combined 68.8 percent,
effective controlling, stake in Scottish Re.