Monday 26 February 2018

IL&P gearing up to sell off major assets

Laura Noonan and Emmet Oliver

IRISH Life & Permanent is gearing up to sell its massive life-insurance business, its investment-management arm and its 30pc stake in Allianz Ireland as the embattled PLC fights to raise cash for its bank.

Today's stress-test results could show that IL&P needs more than €3bn. The group is expecting to be given time to reach some of this target by selling off assets.

The biggest of these is its market-leading life-insurance company Irish Life, which is valued at around €1.6bn. Rapidly-growing Zurich is seen as a leading contender to buy the business, as is Allianz.

Both insurance companies declined to comment last night.

Industry sources say "heads of agreements" for a deal could be hammered out "very quickly", although it could take "six to eight weeks" to reach a final accord.

The head of Irish Life's retail business, Gerry Hassett, yesterday reassured customers that any possible sale would have no impact on anyone with an Irish Life policy.

The PLC is also expected to attempt to sell its 30pc stake in Allianz's Ireland and Northern Ireland business back to the German insurer.

The general insurance business is profit-making and pays dividends, giving Allianz an incentive to do the deal.


Meanwhile, the sale by AIB of its investment-management arm has been thrown into doubt by the imminent takeover of Irish Life & Permanent (IL&P) by the Government.

There is also doubt over whether IL&P can press on with a plan to purchase Quinn Healthcare, a division of Quinn Insurance.

IL&P is reported to be interest in buying AIB's investment arm and the Quinn unit.

The Cork-based healthcare unit is not in administration and has half-a-million customers.

With IL&P now forced to raise up to €1bn in capital, the future of its own insurance and investment arm is in doubt.

The rationale for purchasing AIB Investment Managers (AIBIM) was to create a large Irish asset-management company, with IL&P able to take advantage of AIBIM's existing staff.

While there is still interest in AIBIM from a UK pension fund, the recent expectation was that IL&P would emerge as a preferred bidder.

But with IL&P having to raise capital, it would need government sign-off to do any deal for AIBIM. Dermot Desmond has already left the race to buy AIBIM, it is understood.

AIB is selling the asset as part of a programme of disposals needed to generated badly needed capital.

The sale is being handled by Goodbody Stockbrokers, which used to be owned by AIB but is now in the ownership of Kerry-based Fexco.

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