NEW YORK, Nov 3 (Reuters) - GMAC LLC, the money-losing finance company, has sold the reinsurance operations of its GMAC Insurance unit to Maiden Holdings Ltd, the Bermuda-based reinsurer said on Monday.
Terms were not disclosed, but Maiden said that to help fund the transaction it plans to raise $260 million of equity from a rights offering to shareholders.
Maiden said it will assume $750 million of loss reserves from the GMAC Re LLC business, as well as $200 million of unearned premiums. Following the transaction, Maiden said it will have at least $1 billion of annual written premiums.
About 120 GMAC staff will join the company, and GMAC Re has been renamed Maiden Re. GMAC Re had a $65 million pre-tax profit in 2007, Maiden said.
Reinsurers provide insurance coverage to insurers, in return for premiums.
Private equity firm Cerberus Capital Management LP owns 51 percent of Detroit-based GMAC, while General Motors Corp owns 49 percent.
GMAC is shedding assets after suffering $7.2 billion of losses in the seven quarters ended June 30.
The lender has been hurt by soaring credit losses at its Residential Capital LLC mortgage unit, and by writedowns of leases on sport-utility vehicles that drivers no longer want.
Its credit ratings have fallen deep into junk status, and many analysts have questioned its survival prospects.
GMAC has said it is seeking to become a bank holding company and plans to overhaul and slash its debt load, after in June completing a $60 billion refinancing package.
Maiden shares closed Friday at $4.52 on the Nasdaq.

(Reporting by Jonathan Stempel; editing by John Wallace) Keywords: GMAC/MAIDEN (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net)

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