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Pearl in talks to restructure £3bn debt

Hugh Osmond’s Pearl Group is reportedly holding talks with banks in a bid to restructure its £3bn debt pile.

The firm has £2.2bn of debt in Impala, the consolidation vehicle which bought up Clive Cowdery’s Resolution last year, and £800m across the rest of the business.

The FSA is understood to be tightening rules on insurers’ capital amid turmoil in stock and corporate bond markets. As a result, Pearl may no longer be allowed to release capital from its life funds to pay interest owed to banks.

This follows news last week that Clive Cowdery and four other former directors of the original Resolution are under FSA investigation for “certain actions” undertaken during the sale of the firm to Osmond’s Pearl.

Pearl is also reportedly under pressure from bond investors who have set up an action group due to fears about the security of their investments.

Syndaxi Chartered Financial Planners managing director Robert Reid believes the need to restructure Pearl’s debt was inevitable.

He says: “If you are a zombie company funded from borrowing rather than capital you must have a limited shelf life because at some point you must start to lose income from peoples’ policies maturing or from people moving away due to poor investment performance or poor service.

“So it is an inevitable situation which surely the guys at Pearl would have thought through because they were always going to have to restructure or reschedule. They have a dwindling income flow and if the market does not come back quickly enough then there will be a lot of pressure.”


Make a difference

It was a matter of luck I suppose that I began a career in the financial services industry. Home on a 72-hour pass from my posting in Germany as a national serviceman, a mate said his girlfriend’s boss was looking for a new recruit. It was a good job – you got a car and played golf most days.

We need a regulator of the regulator

I read with incredulity that the Association of British Insurers is warning against major regulatory changes. Do these people live on the same planet as the rest of us? How can the ABI possibly consider the FSA is not in need of major structural changes?

Inheritance tax when it is relevant

Neil Jones is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. A trust can offer significant advantages when an individual is […]


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