HCI Group Increases Operational and Capital Flexibility

HCI Group, a holding company with operations in homeowners insurance, information technology services, real estate, and reinsurance, announced strategic moves aimed at enhancing operational and capital flexibility. The company has redeemed all preferred shares of its TypTap Insurance subsidiary held by Centerbridge, amounting to approximately $100 million. Additionally, HCI Group has extended the expiration date of its warrant to purchase up to 750,000 shares of HCI common stock.

Redemption and Warrant Extension

The redemption of the preferred shares includes accrued and unpaid dividends of approximately $2.9 million, contributing to HCI Group’s objective of strengthening its position for future growth opportunities. The warrant extension involves two sets of underlying warrant shares. The expiration date for 450,000 warrant shares has been extended from December 31, 2026, to December 31, 2028. The expiration date for the remaining 300,000 warrant shares remains unchanged.

Non-Cash Deemed Dividend

In the first quarter of this year, HCI Group will recognize a one-time non-cash deemed dividend associated with the warrant extension. This development aligns with the company’s commitment to bolster its financial standing and maintain capital flexibility.

Shelf Registration and Expansion of Fundraising Ability

HCI Group has filed a shelf registration and established an “at-the-market” facility that allows it to raise up to $75 million through the issuance of new shares of common stock. This step further enhances the company’s ability to adapt to evolving market conditions and capitalize on growth opportunities.

By implementing these strategic measures, HCI Group demonstrates its determination to ensure long-term success and remain agile in an ever-changing business landscape.