Thursday 5th July 2018
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The administrators of CBL Corp said an agreement has been reached to sell its UK-based Professional Fee Protection business to US private equity firms Highbridge Principal Strategies and Madison Dearborn Partners. The sale terms were not disclosed and the deal is subject to regulatory approval.
The sale of PFP - which offers insurance cover that indemnifies business owners for the cost of professional accounting fees that occur in the event of a tax enquiry - resulted from a process initiated by the administrators. The agreement has been entered into by the CBL subsidiary that owns the PFP business – PFP Holdings, Brendon Gibson and Neale Jackson of KordaMentha said in a statement to the stock exchange.
CBL Corp bought a 92 percent holding in the business in December 2015 for a purchase price of $17 million.
PfP managing director Kevin Igoe said the deal " will provide PFP and our clients with significant financial security and a wealth of exciting opportunity when it comes to the future development of our products and services."
Auckland-based CBL Corp had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority, the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL’s international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.
CBL then appointed KordaMentha voluntary administrators on March 2 after the Reserve Bank sought an interim liquidation of its New Zealand supervised arm and the Central Bank of Ireland made a similar move against the insurer's European division. CBL Insurance is a unit of NZX-listed company, CBL Corp.
The Serious Fraud Office is now investigating CBL Insurance and associated entities, adding to investigations by the Reserve Bank and Financial Markets Authority.
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