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EAG forced to sell Nvesta to cover liabilities

The defunct Eurolife Assurance Group has been forced to sell off Nvesta to cover its liabilities and pay compensation to policyholders.

Nvesta’s parent company EAG plunged into administration in August when this year’s £700,000 installment of a five-year compensation plan to policyholders who invested £17m into secured bonds in 1999 fell due.
Industry sources say Nvesta’s book of structured product is worth approximately £120m at current market value and will be worth about £140m by the time the policies mature by 2012.
It is looking for an investor to buy its book of business or buy the company outright.
Nvesta claims there is potential to generate more than £2.5m in revenue over the next four years from recurring revenue and commission on sales of replacement products to holders of maturing plans.
The firm has 12,000 plan holders and sold mainly through IFAs.
Nvesta is issuing an information memorandum subject to interested parties subject to a confidentiality agreement.
Nvesta finance director Simon Bottomley says it had no alternative but to close for new business and enact a run-off plan.
“The sale of Nvesta offers an opportunity for a buyer to fast track into the structured product sector. Alternatively, a buyer with an existing structured product business could take on the book with minimal additional overhead, adding most of the revenue generated to their bottom line.”

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