15th Sep 2014 07:24
LONDON (Alliance News) - Investec PLC Monday said it has agreed to sell Irish intermediated mortgage business Start Mortgage Holdings Ltd, as well as certain other Irish mortgage assets, to an affiliate of Lone Star Funds, following on from last week's sale of specialist UK mortgage business Kensington Group PLC.
Investec said the deal is part of its objective to simplify and reshape its specialist banking business, and reduce assets within its legacy non-core business.
In a statement, Investec said the deal includes Start Mortgage Holdings' mortgage origination platform, brand, operations, and employees.
Start Mortgage Holdings and the other Irish mortgage assets reported a GBP21.0 million pretax loss in the year ended March 31, Investec said. They had GBP540.0 million of gross assets and about 70 employees at the end of the year.
Investec said its funding line to the business being sold, which was approximately GBP270.0 million at the end of March, is to be repaid entirely when the deal completes.
It expects the deal to result in an an increase in adjusted earnings per share to 40.0 pence, from 38.0p on a pro forma basis on March 31, as well as a decrease in net asset value per share to 299.1p, from 308.7p.
In addition, Investec expects the deal to have a "marginal negative impact" on its capital ratios. Taking into account this latest deal, last week's sale of Kensington Group Ltd and the prior sale of Investec Bank (Australia) Ltd, Investec expects its common equity tier 1 ratio to increase to about 11.1%, from the 8.8% recorded at the end of March. It expects its leverage ratio to rise to about 8.9%, from 7.4%.
Completion is expected towards the end of 2014 and is subject to regulatory approval.
Investec last week sold Kensington Group PLC, along with other of mortgage assets, to funds managed by Blackstone Tactical Opportunities Advisors LLC and TPG Special Situations Partners for GBP180.0 million.
Investec shares were Monday quoted down 0.1% at 557.50p.
By Samuel Agini; [email protected]; @samuelagini
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