Millfield has sold 20 per cent of its stake in Lifetime despite earlier pledges from chief executive Paul Tebbutt that it would “not consider selling a chunk” of the operation.
The IFA group, which is repaying loans of £15m from product providers for its merger with Inter-Alliance, has received £824,400 from Norwich Union for 20.1 per cent of the wrap provider.
While Tebbutt previously said he did not want to dilute Millfield's stake, he did admit he was prepared to reduce the loans by issuing shares.
Under the terms of the deal, Norwich Union now owns a 70 per cent controlling stake in Lifetime and is subscribing for new shares in Lifetime for a total of £13m payable in two tranches.
Millfield has been left with a 24.7 per cent stake in the business, with the founders holding around 1.3 per cent each.
When the £15m loan was revealed in August, Tebbutt told Money Marketing: “We are confident we can repay the loans and would not consider selling a chunk of Lifetime.
“We would consider converting the debt into shares if the providers were agreeable but we do not want further dilution.”
Tebbutt was unavailable for comment.