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Eurolife’s bond investors to vote on partial payout

Thousands of investors in the Eurolife secured bond are being asked to vote on a partial repayment plan to recoup some of the £17m losses.

Around 2,300 investors should have been repaid capital on January 23 but have had to wait three weeks for news of the restructuring proposal.

The proposal issued by Eurolife involves the repayment to bondholders of between 60 per cent and 86 per cent of the original issue price, which it claims, taken together with the interest received already, will give a minimum total repayment of between 86 per cent and 93 per cent of the original issue price over the next four-and-a-half years.

This would be funded by the proposed disposal of assets and subsidiaries of Eurolife Assurance Group.

If bondholders do not vote for the proposals, then the company would immediately enter into administration and the firm would not be covered by the Financial Services Compensation Scheme although IFAs who advised on the bond could be declared in default of the FSCS.

The bond is a structured debt lent to Eurolife Assurance through subsidiary company Eurolife Capital Funding. Last year, Eurolife admitted that the firm could not repay the debt.

The FSA has provided a question and answer sheet for investors on its website while Nvesta, part of Eurolife Group, has also issued a statement on its position in the proposal.

In a letter to investors, Eurolife managing director David Wootton apologises for the delay in informing them of the resolution.

He says: “This is the first occasion that any investor has received less than they were due from any group company and although many of the reasons for this have been outside my control, I would still like to sincerely apologise to you personally for this failure.”

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