Partnership Assurance Group’s chief executive has dismissed the idea that his company is considering debt because the approaching pension reforms have battered its share price.
Having specialised in annuities, Partnership is among the companies that could be hardest hit by the pension rules coming into force in April.
On 19 March 2014, the day George Osborne unveiled his pension reforms, Partnership shares fell more than 50 per cent, opening at £3.19 but closing at £1.43.
But Mr Groves said Partnership was probably the only listed life insurance company with no debt, and that it was not the “optimal structure” to be entirely funded by equity.
His comments followed the announcement that Partnership had hired Bank of America Merrill Lynch and Royal Bank of Scotland to arrange a series of fixed-income investor meetings to assess a sterling-denominated subordinated debt transaction issued by Partnership.
On 7 January 2015, the day of the announcement, Partnership shares opened at £133.75 but closed at £132.50.
Mr Groves said the company was looking to raise capital for ongoing projects, including expansion in the US.
Colin Rodger, managing director of Glasgow-based Alexander Sloan Financial Planning, said: “There has been quite a downturn in the annuity business, and I do not really see that changing in the forseeable future.”