Ernst & Young has undertaken an actuarial valuation of Lifemark’s traded life settlement assets and has submitted it to US hedge fund CarVal, which is considering offering a lifeline restructure deal to the group.
The Luxemburg office of KPMG – Lifemark’s provisional administrator – has handed the valuation to CarVal which is in the final stages of deciding whether to provide a loan of around £25m, Money Marketing understands.
The confidential E&Y report provides an indication of the expected scale of losses on the initial investments that bondholders of Lifemark would have to accept under any restructure deal.
This will help CarVal decide whether any bid that they put in for the Lifemark books would be accepted or rejected by the bondholders.
Some of the 23,000 bondholders have expressed concerns about the CarVal deal, claiming it prioritises paying the fees of the various companies involved like KPMG, E&Y and Keydata administrator PricewaterhouseCoopers. Their total capital outlay was around £349m and the bonds’ nominal value – what they are expected to be worth at maturity – is closer to £600m.
CarVal is expected to make a significantly lower offer than this because the bonds require regular injections of capital, which Lifemark itself cannot provide, in order to avoid the investments collapsing.