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Intrinsic management buy out Lloyds – £20m dividends waived

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Intrinsic Financial Services has undergone a capital restructure which sees the firm’s management buy out shareholder Lloyds Banking Group and other main shareholders Sanlam and Friends Life waive six years worth of dividend payouts.

Sanlam, Friends Life and Intrinsic management have all agreed to waive all preference share accrued dividends which have been building up since Intrinsic’s inception in 2006.

The dividends were due to be paid out in 2013.

Money Marketing understands the value of the dividends to be worth around £20m.

As a result of the forfeiting of the payments, Intrinsic which posted a £2.5m loss for 2011, says it expects to make a profit of between £25m and £30m in 2012.

In an email sent to Intrinsic appointed representatives on Friday, chief executive Richard Freeman said: “I am delighted to tell you that we have worked with our major shareholders to strengthen our balance sheet and to ensure that we are better placed to take full advantage of the developing market opportunities.”

As part of the deal, shareholders will now receive a total of £19m in the event of a sale or flotation, £27m less than the £46m agreed previously.

Financial Escape director Phil Castle says: “The management is obviously looking to have more sway over how the business is run by buying out Lloyds. Whether Intrinsic can make a profit of £30m this year will depend on how much work it has to do in getting its advisers ready for RDR. If there is a lot still to be done it may not achieve that.”

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  1. Smoke and mirrors

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