Note 15. Common shareholders’ equity, mezzanine equity, and non-controlling interests

Common shareholder’s equity

The authorized share capital of the Company consists of 500,000,000 Common shares, $0.01 par value per share, and 15,000,000 Series B preference shares, $0.01 par value per share.

The following table presents changes in the Company’s issued and outstanding Common shares for the years ended December 31, 2018, 2017, and 2016, respectively:


	2018	2017	2016
Common shares:
Shares issued and outstanding, beginning of year	120,000,000	120,000,000	12,000
Issuance of shares (See Note 3)	4,670,531	—	—
Shares redeemed (See Note 3)	(9,519,280)	—	—
Stock split(1)	—	—	119,988,000
Shares issued and outstanding, end of year	115,151,251	120,000,000	120,000,000

(1)

On April 27, 2016, the Company split its common shares by a multiple of 10,000 resulting in 120,000,000 common shares issued and outstanding and changed the par value of the common shares from $1.00 per share to $0.01 per share.

Redeemed shares

On November 5, 2018, the Company repurchased 9,519,280 common shares from CM Bermuda in connection with the Merger (“redeemed shares”) for $164.0 million. (See Note 3.) The redeemed shares were canceled and the cost of the redeemed shares are included as a reduction to Additional paid-in surplus.

Dividends

The Company did not pay any dividends during the years ended December 31, 2018 and 2017, respectively. The Company paid common dividends of $27.0 million in cash and investments during the year ended December 31, 2016.

Mezzanine equity

Series B Preference Shares

On November 5, 2018, in connection with the closing of the Merger, Sirius Group issued 11,901,670 of the 15,000,000 authorized Series B preference shares, with a par value of $0.01 per share, as part of the Sirius Group Private Placement. (See Note 3.)

The Series B preference shares rank senior to common shares with respect to dividend rights, rights of liquidation, winding-up, or dissolution of the Company and junior to all of the Company’s existing and future policyholder obligations and debt obligations. Without the consent of the holders of the Series B preference shares, the Company may not issue any class or series of shares that rank senior or pari passu with the Series B preference shares as to the payment of dividends or as to distribution of assets upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, if the aggregate gross proceeds from the issuance of all such senior or pari passu shares equals or exceeds $100 million.

The Company adjusts the carrying value of the Series B preference shares to equal the redemption value at the end of each reporting period. At December 31, 2018, the balance of the Series B preference shares was $232.2 million.

Series A Redeemable Preference Shares

In connection with the acquisition of IMG, the Company issued mandatorily convertible stock in the form of Series A redeemable preference shares as a portion of the consideration paid. (See Note 3.) The Company issued 100,000 of the 150,000 authorized Series A redeemable preference shares to the seller of IMG. Each Series A redeemable preference share has a liquidation preference per share of $1,000.

On November 5, 2018, in connection with the closing of the Merger, the Company redeemed the 100,000 outstanding shares of Series A redeemable preference shares for $95.0 million. (See Note 3.) Sirius Group recorded a $13.8 million gain on the redemption of the Series A redeemable preference shares.

At December 31, 2017, the balance of the Series A redeemable preference shares with accrued dividends was $106.1 million.

Non-controlling interests

Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. At December 31, 2018 and 2017, Sirius Group’s balance sheet included $1.7 million and $0.2 million, respectively, in non-controlling interests.

The following table shows the change in non-controlling interest for the years ended December 31, 2018, 2017, and 2016:


(Millions)	Total
Non-controlling interests as of December 31, 2015	$	250.1
Net income attributable to non-controlling interests		19.3
Dividends to non-controlling interests		(18.8)
Other, net		0.7
Non-controlling interests as of December 31, 2016	$	251.3
Net income attributable to non-controlling interests		13.7
Dividends to non-controlling interests		(14.1)
Other, net		(250.7)
Non-controlling interests as of December 31, 2017	$	0.2
Net income attributable to non-controlling interests		1.4
Dividends to non-controlling interests		—
Other, net		0.1
Non-controlling interests as of December 31, 2018	$	1.7

SIG Preference Shares

On October 25, 2017, the Company’s indirect wholly-owned subsidiary, Sirius International Group, Ltd., redeemed all of its outstanding 250,000 Fixed/Floating Perpetual Non-Cumulative Preference Shares (“SIG Preference Shares”). The redemption price equaled the $1,000 liquidation preference per preference share. Sirius Group accounted for the SIG Preference Shares as a conditionally redeemable instrument within Non-controlling interests.

Alstead Re

As of December 31, 2018 and 2017, Sirius Group recorded non-controlling interest of $1.7 million and $0.2 million, respectively, in Alstead Re Insurance Company (“Alstead Re”). (See Note 20.)