Phoenix Group, the indebted life insurance group that used to be known as Pearl, has struck a deal with bondholders to restructure £500m of its debt.
Investors have approved a plan that will see the bonds reduced by 15 per cent. The 6.6 per cent interest rate will remain, and the cut in the size of the securities is less than the 25 per cent that the company had originally lobbied for. Under the terms of the deal, the company will be unable to pay shareholder dividends.
Phoenix, which acquires closed life funds, was founded up by Hugh Osmond, the co-founder of the Pizza Express restaurant chain, and incurred heavy debts to finance its takeover of rival Resolution in 2007.
Last year, the firm negotiated a financial overhaul under which its banks wrote off 14 per cent of loans, while its shareholders gave up 70 per cent of their holdings. Phoenix was acquired by an Amsterdam-listed cash shell as part of the agreement, giving the privately held group a stock market listing for the first time, and it is now seeking a primary listing in London.