Phoenix generates £117m from Axa acquisition

Phoenix generates £117m from Axa acquisition

Phoenix Group generated £486m of cash in 2016, helped by its acquisition of Axa's pensions business.

Of this, £117m was from the integration of the Axa Wealth pensions and protection businesses which  were bought in November.

In May Axa agreed to sell its British investment, pensions and protection businesses, Axa Wealth and SunLife, to Phoenix as it exited the UK insurance market.

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Phoenix had set itself a target of generating between £350m and £450m in cash during 2016, which it has exceeded.

In a statement this morning the company said: “Furthermore, Phoenix reiterates its expectation that it will generate a total of at least £250m of cash from the integration of the Axa businesses within six months of completion of the acquisition.”

In December Phoenix repaid all the £182m bank debt used to finance the Axa acquisition.

Meanwhile the £250m short-term bank facility relating to the Abbey Life acquisition has been converted into a tranche of the company’s existing bank revolving credit facility, increasing its size from £650m to £900m.

Last month £50m of the credit facility was repaid, leaving £850m outstanding as of 31 December 2016.

Phoenix has also set up a proposed debt issuance, with the proceeds expected to be used to reduce the company’s outstanding bank debt.

PGH Capital Plc established a £3bn Euro Medium Term Note programme guaranteed on a senior or subordinated basis by Phoenix.

This will be followed by a benchmark sterling denominated 5.5 year Tier 3 transaction to be guaranteed on a subordinated basis, subject to market conditions.

PGH Capital PLC has mandated Citigroup Global Markets Limited, JP Morgan Securities plc, Lloyds Bank plc, Merrill Lynch International and The Royal Bank of Scotland plc to arrange a series of credit investor meetings in London starting on 12 January.