Britannic Group has today countered speculation of asset disposals by admitting that it is in talks ...
Britannic Group has today countered speculation of asset disposals by admitting that it is in talks with Paragon about a possible sale of its Britannic Money mortgage business.
The statement went out on the Stock Exchange's Regulatory News Service this morning, cryptically pointing to further information "in due course".
"Britannic Group confirms that it is in talks with the Paragon Group of Companies regarding the potential sale of Britannic Money, its specialised mortgage lending subsidiary," the statement reads.
"A further announcement will be made in due course."
It is understood that the "talks" referred to in the statement are not notification of a formal bid.
This means the two companies still have significant leeway in negotiating the timing and pricing of any sale - Stock Exchange rules mean that once any bid is formally made it must adhere to a strict timetable.
According to Britannic's results for the year to December 2002, its Money business reduced its losses by 82%, to £5m compared to £28m in 2001.
This was done by focusing on the professional buy-to-let sector, imposing stiff early redemption penalties and maintaining an average 60% loan-to-value ratio. as well as cutting costs, the company says.
Still, Britannic is under intense shareholder and policyholder pressure after cutting bonuses in its Assurance division, and cutting dividends to maintain reserve capital.
Britannic Assurance saw profit on sales of with profits slump last year to just £9.8m from £40m the previous year.
Britannic Retirement Solutions reported losses increased to £29.3m from £16.3m, and the Group as a whole sufferd a pre-tax loss of £297m, compounding the loss of £181m reported for 2001.
Britannic shares are up 5.5p to 215p today, but are still well down on the £7 price paid in June last year.
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