THE potential new investors in Pearl Assurance, Hugh Osmond’s highly-indebted insurance group, could end up with 60 per cent of the equity as part of a refinancing deal currently being discussed, CityA.M. has learned.
Liberty Acquisition Holdings, an Amsterdam-listed special purpose vehicle headed by two private equity investors, Nicholas Berggruen and Martin Franklin, is in talks with Pearl and its bankers about a deal that would see it inject around £500m in equity into the group, whose debts are £3bn.
If the deal is agreed by all sides – the banks are putting it to their credit committees this week – Osmond and fellow founder shareholder TDR will be left with a combined stake of around 30 per cent, down from the current 100 per cent. The banks would hold around 10 per cent of the equity, or more likely a long-dated convertible bond.
Well-placed sources say it will be fascinating to see whether Osmond will have as great a say in the running of the group once he is diluted by the new shareholders.
The banks, who at one point in the negotiations were being asked to take a 40 per cent write-off in the value of their loans, look like getting away with a much smaller sacrifice in order to seal the deal. Osmond hopes that once the deal is completed the group can focus on moving towards a stock market flotation.