Pearl: Do not blackmail us

David Hellier
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PEARL, the insurance group that hopes to list in London sometime this year, said yesterday it wouldn’t allow itself to be blackmailed after it lost a key vote over a compromise offer to a disgruntled group of bondholders.

Pearl, which was forced into a financial restructuring last year, withheld an interest payment worth £33m to holders of £500m bonds, sparking outrage amongst the bondholders.

Yesterday the bondholders voted unanimously to reject an offer from Pearl that would have seen the coupon on their bonds restored in return for them taking a 25 per cent reduction in the value of their bonds.

Pearl, chaired by Ron Sandler, said the group had made what it considered a “fair offer” and the “best offer we could make.”

A spokesman said that when the group, which was founded by Hugh Osmond, went though its financial restructuring last year, its equity holders and bank lenders each took write-downs and there was therefore a limit as to how much these stakeholders would allow to go out of the company to placate the bondholders.

At least two members of the Pearl board, who are associated with 60 per cent shareholder Liberty Acquisitions, are known to be keen to take an ultra tough line with the bondholders. During the discussions ahead of yesterday’s meeting, they argued that the offer being made to the bondholders should not have been as generous as it was.

Pearl said that the result of yesterday’s meeting would not derail its plans for a stock exchange listing, although many think the dispute will cloud preparations.

Pearl chief executive Jonathan Moss at least held out some hope of a breakthrough when he said: “We remain willing to engage with Noteholders and to discuss any proposals they may have for the resolution of their issues.”