Lloyds Banking To Sell Heidelberger Leben For About EUR 300 Mln - Quick Facts

(RTTNews) - Lloyds Banking Group plc (LYG, LLOY.L) has agreed to sell its German life insurance business Heidelberger Lebensversicherung AG to a joint venture company owned by Cinven Partners LLP and Hannover Rück SE for around 300 million euros cash, or about 250 million pounds at current exchange rates.

Heidelberger Leben is a specialist provider of unit-linked pension, investment and life assurance products in Germany. The senior management employed by Heidelberger Leben would move with the business on the sale completion. The business would continue to service the Group's policies in Germany and Austria written under the Clerical Medical brand, under a long-term administration deal.

The gross assets subject to the transaction are 7.2 billion pounds, that are predominantly policyholder assets. The business reported a statutory loss of 38 million pounds in 2012. The Heidelberger Leben sale may result in a loss on disposal of about 330 million pounds in the Group's accounts but, combined with the sale of other assets, is now expected to result in a benefit to the Group's common equity tier 1 capital of some 0.4 billion pounds upon completion, equivalent to an approximate benefit of 13 basis points on a pro forma fully loaded CRD IV basis.

The sale, whose cash proceeds would be used for general corporate purposes, is expected to close in early 2014.

Separately, the Group announced the sale of a portfolio of leveraged loans to ELQ Investors II Ltd., an unit of Goldman Sachs Group, Inc. (GS), for 254 million pounds cash, with a further 2 million pounds payable within 6 months, if certain financial conditions are met. The portfolio with gross assets of 283 million pounds, predominantly includes UK based assets in a range of sectors including manufacturing and retail. The Portfolio generated 11 million pounds of profits in 2012.

This transaction, which is a part of the Group's continued non-core asset reduction strategy, may be complete by September 2013 end.