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Eurolife offers investors 50% to get out early

Eurolife Assurance is offering investors in its secured bond structured product half their original investment back if they want to walk away from the company now.

The alternative is to stick with the group’s five-year restructuring plan which aims to repay 88 per cent of the original investment by 2009.

The bond was marketed in 1999 and raised around 17m by offering 6.5 per cent income for five and a half years or 40 per cent growth with capital protection but it defaulted, failing to repay money in January.

An investor with a 7,000 Isa investment in the growth plan will get the first repayment of 2,763.60 on September 30, with additional annual payments between 2006-09 totalling a further 3,258. By accepting the new offer, investors would forfeit these additional payments for a one-off payment of 736.40 on top of the initial payment and draw a line under their involvement with Eurolife. The firm has so far had just 120 requests from investors to cash in early.

Managing director David Wootton says: “It is purely an option for those who want to get out early, I do not expect many people to take it but we are just responding to requests. I am not expecting wholesale take-up of the offer, nor would I necessarily recommend anybody to take it because they are forfeiting the later payments.”

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