10m pounds property portfolio rises from LUI collapse

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The Independent Online
A PROPERTY portfolio worth pounds 10m has been rescued from the wreckage of Britain's biggest insurance collapse, joining the stock market this week as the property sector's newest recruit, writes Tom Stevenson.

Brightstone Properties used to be a subsidiary of LUI, the insurance company brought down by its exposure to long-term employee claims in the US. It was sold to Walbrook, another LUI subsidiary, but both are now insolvent with liabilities estimated at up to pounds 9bn.

The placing of seven million shares in Brightstone at 125p values the company at pounds 8.75m. That compares with net assets of pounds 10.3m, representing a 15 per cent discount.

Richard Jacobs, chief executive, said the company would expand its portfolio away from its Nottingham base, where two-thirds of its assets are located. The existing portfolio is 90 per cent let and generates a rental income of pounds 1.3m.

Mr Jacobs said that gearing would be allowed to rise to 100 per cent if necessary. He said he would follow the policies that raised the value of the portfolio from pounds 3.1m in 1983 to pounds 10.25m last year.

Dealings begin on Thursday.