Electra Investment Trust has sold Vendcrown, the holding company of Premium Credit Limited, to MBNA Europe Bank. Premium Credit was acquired in 1996 from HSBC Gibbs Holdings Limited (now HSBC Insurance Brokers Holdings Limited) in a transaction arranged by Electra Partners Europe. The initial financing involved Electra and other funds managed by Electra Partners Europe as well as HSBC Insurance Brokers Holdings Limited and other investors. The IRR on the investment will be around 29%.
The total aggregate proceeds on completion attributable to Electra and the other funds managed by Electra Partners Europe will be £84.1m, which compares with a residual investment cost of £15.7m. A further £4.4m may also become payable. Proceeds from the disposal will be used to reduce bank borrowings.
David Symondson, director of Electra Partners Europe, said: “We are pleased to have been involved with Premium Credit and are delighted with the sale of the business to MBNA. Over the seven years we have held the investment, the IRR will be around 29%. The return on this investment is a further demonstration of the quality of Electra’s portfolio.”
Electra also recently announced the refinancing of Baxi Group, see EVCJ February issue, page 25. The transaction represented an uplift in Electra’s net asset value per share of 21.2 pence over the audited new asset value of 760 pence per share at September 30, 2003. The total uplift in Electra’s net asset value per share amounts to 44.8 pence as a result of the Baxi Group and Vendcrown transactions.