Intrinsic Financial Services has undergone a capital restructure that has seen its 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 agreed to waive all preference share-accrued dividends, which have been building up since Intrinsic’s inception in 2006.
Money Marketing understands the dividends, which were due to be paid out in 2013, were worth around £20m.
As a result 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 last week, 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. Whether Intrinsic can make a profit of £30m this year will depend on how much work it has to do to get its advisers ready for the RDR.”