Talks between US hedge fund CarVal and the Luxembourg arm of KPMG over a $20m restructuring loan for Lifemark have this morning collapsed.
CarVal was pushing for further due diligence work on Lifemark’s $1.3bn portfolio of traded life policies but KPMG has decided the costs associated with this would be too high, Money Marketing understands.
The news means KPMG is now fighting to find another party to provide a rescue loan to keep Lifemark’s bond portfolios – which 23,000 UK investors were placed in by failed structured product provider Keydata – from collapsing.
Unless another party steps in the administrator will have no choice but to begin winding up the portfolio while seeking to keep policies active – this process could see the Lifemark portfolio fall sharply in value.
KPMG has already commissioned valuation work from Deloitte and an independent third party and paid for a full actuarial valuation from Ernst & Young that cost almost £500,000.
The Luxembourg-based administrator of Lifemark Eric Collard says he is now open to approaches from other restructuring parties.
He says: “Currently there is no engagement with CarVal. Until today I have refrained from discussing this with other parties but it looks like any deal with CarVal is at risk. I need to look for any other opportunities.”
It was reported in July that CarVal had walked away from Lifemark talks, but it later emerged Lifemark had paid off a smaller, bridging loan that CarVal had provided and talks were continuing.