Hugh Osmond faced with 200m Pearl share loss

BUYOUT tycoon Hugh Osmond could lose around £200m on the value of his shares in the insurance giant Pearl as part of its emergency debt restructuring deal.

Osmond is nailing down details on a deal, which will see its consortium of bankers, led by Lloyd’s Banking Group, restructure its £3bn debt.

A source close to the entrepreneur said yesterday that when he bought Pearl at the height of the financial services boom such groups were trading at around 120 per cent of embedded value, but that has now fallen to around 50 to 60 per cent.

But in return for the losses, set to be crystallised by the debt restructure, the firm will finally be able to stabilise its books.

Dutch Private-equity group Liberty is expected to inject £500m of new equity into the group, while Pearl’s roughly 17 current bank lenders will end up with around 90 per cent of its final market value.

The problems for Pearl began when it merged with Resolution, the buyout vehicle of Clive Cowdery, for £5bn in a highly-leveraged deal. It is now thought Cowdery may have his eye on buying back the closed life books he sold to Osmond. Pearl has plans – rubbished by some – to list on the stock exchange if the debt restructure completes successfully.