Permanent TSB Group Holdings PLC Sale Agreed for Non-Core UK Assets (5690N)

TIDMIL0A TIDM73HR

RNS Number : 5690N

Permanent TSB Group Holdings PLC

27 October 2016

This announcement contains Inside Information as defined under Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse.

Statement by Permanent TSB Group Holdings plc

Permanent TSB plc (trading as Permanent TSB) is the wholly owned retail banking subsidiary of Permanent TSB Group Holdings plc.

Headline: Permanent TSB agrees sale of GBPGBP2.29 billion of non-core loans held by Lansdowne 199 Ltd in the United Kingdom.

Thursday 27(th) October 2016. Permanent TSB has agreed the sale of GBPGBP2.29 billion of loans held by its UK subsidiary, Lansdowne 199 Ltd (L199). The loan assets comprise the total balance of the residual book of the Group's former UK subsidiary, Capital Home Loans Limited (CHL). The residual book was transferred to L199 in July 2015 following the sale of circa 50% of the CHL loan portfolio and the associated legal entity, CHL, to an affiliate of Cerberus Capital Management, L.P. This transaction, once completed, means that the Group will have successfully de-leveraged 100% of the CHL loan portfolio, as required under the Group's Restructuring Plan.

The acquirer of the loans is an affiliate of Cerberus Capital Management, L.P. The Group was advised by Morgan Stanley & Co International plc. The gross proceeds for the sale of GBPGBP2.29 billion of loan assets (RWAs of GBPGBP855 million) is circa GBPGBP1.95 billion. Consideration is in the form of a cash settlement and sales proceeds will be used to reduce the Group's borrowings.

At 31 December 2015, losses attributable to the assets to be disposed were circa GBPGBP8.9 million (circa EUR12.3 million)[1]. On completion, the transaction is estimated to have a net adverse impact on the capital of the Group of circa GBPGBP300 million (circa EUR333 million at current exchange rates), which takes into account all estimated fees and costs with the completion of the transaction. The sale is expected to close before the 31 December 2016.

Speaking today, Jeremy Masding, Group Chief Executive, said that the sale of these assets was a significant event for the Group; "This transaction is a milestone event for the Group. Its completion in the coming weeks will conclude the very ambitious deleveraging programme of some EUR8.4 billion which was set out for the Group under the Restructuring Plan agreed with the European authorities.

Perhaps most importantly, it will complete our pivot to the Irish retail and SME marketplace and allow us to focus exclusively on growing our commercial position in key segments of the market here. That is now our overriding priority, as Ireland's only pure domestic retail and SME bank."

Contacts

 
 Investors and Analysts              Media 
  Rajesh Manirajan                    Ray Gordon 
  Head of Investor Relations          Gordon MRM 
  [e-mail]    [e-mail] 
  [phone]                     [phone] 
 

[1] The income statement impacts for L199 are based on the 2015 average rate of GBPGBP0.725/EUR. Note this takes account of the period from L199 establishment in July 2015 to December 2015.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 27, 2016 02:00 ET (06:00 GMT)