Johannesburg - Reinet Investments [JSE:REI] announced on Wednesday
that it had agreed to enter definitive agreements to invest in the pension
insurance business of Pension Corporation‚ a UK company.
The agreement is subject to the fulfilment of certain
conditions‚ including regulatory and other approvals.
Under the terms of the agreement‚ Reinet said it was committed
to invest up to £400m on the basis of a valuation of Pension Corporations
insurance business of £525m before the capital increase but after closing
Of the £400m investment‚ £100m would be contributed at
closing‚ while the remainder was expected to be drawn down as required over a
maximum period of five years‚ the company said.
Reinet would have voting and governance rights from closing
commensurate with its proposed investment‚ it said.
On May 27 last year‚ Reinet announced its wholly owned
subsidiary‚ Reinet Fund‚ was in exclusive negotiations with Pension Corporation
and its key stakeholders for a transaction involving an investment by Reinet of
approximately £400m through which it would become a principal shareholder in
the pension insurance business of Pension Corporation.
Pension Corporation is one of the UK’s leading providers of
risk-management solutions to defined benefit pension funds.
Pension Corporation’s insurance subsidiary‚ Pension
Insurance Corporation‚ is authorised and regulated as an insurance company by
the Financial Services Authority in the UK. It has £5.5bn in assets and has
insured almost 60‚000 pension fund members.
Clients include FTSE 100 companies‚ multinationals and the
public sector. Pension Corporation concluded the first UK public sector backed
pension insurance buyout and the first buyout over £1bn.
Reinet said a further announcement would be made upon fulfillment
of all conditions precedent and completion of the transaction.