Sturge seeks to sell assets to management

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The Independent Online
STURGE Holdings, which owns Lloyd's of London agency businesses, is seeking shareholder approval to sell the assets of its two members' agencies, RW Sturge and Donner, to a management buyout team for a maximum of pounds 5.5m.

The sale means Sturge, which reported a pre-tax profit of pounds 1.2m last year, will have to write off pounds 12.8m of goodwill through its profit and loss account for the current year.

The management of the agencies - which handle the affairs of names at Lloyd's - will be given a 51 per cent stake in a new company to be called Falcon. They will acquire the balance within five years.

The asset to be sold is the book of names who are still underwriting, which will be transferred to Falcon. RW Sturge and Donner will continue to manage the affairs of Sturge names who no longer underwrite at Lloyd's but who must remain to meet losses.

James MacDonald, Sturge's finance director, stressed the proceeds of the sale would stay in the RW Sturge and Donner agencies rather than going to Sturge in general.

Lloyd's authorities are investigating claims that proceeds from the sale of other agency businesses have been diverted to prevent names getting access to them in the event of successful litigation. Although no proceedings have been issued against Sturge agencies, an action group of Sturge names has been formed to pursue possible claims.