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Converium sells debt-ridden US unit to Berkshire

Swiss reinsurance company Converium has secured an agreement for US insurance titan Berkshire Hathaway to take its debt-ridden US reinsurance unit off its hands in a cut-price deal.

<p>The transfer of the North American business will cost Berkshire $295 million, $95 million in cash and $200 million in assumed debt, Reuters has reported.<br /><br />The Swiss firm has been looking for a buyer to take the troubled division off its hands in order to remove the burden from its credit rating.<br /><br />Converium has been struggling with the business since discovering two years ago that there was a $500 million hole in its claims reserves. Currently, the North American unit is closed to new business.<br /><br />It is hoped that the sale, in conjunction with an imminent settlement with US authorities over restated results, will enable Converium to recover an A-grading for its credit rating.</p>