Pearl seeks move away from 'debt-funded' model

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  • Pearl seeks move away from 'debt-funded' model

UK - Pearl Group has confirmed it is in advanced discussions with investors and lenders to raise £500m (€554m) in new equity and to restructure its existing capital to allow it take advantage of future acquisition opportunities.

The firm, which purchased Resolution Group including Resolution Asset Management last year, said the move to raise more money is an effort to break away from its existing "debt-funded" business model, and revealed once it has raised the new money and completed the restructuring it intends to seek a listing on the London Stock Exchange (LSE).

Pearl stated: "We are in a market full of opportunities, but one in which the debt-funded acquisition model that served Pearl and others so well in the past is simply no longer appropriate."

As a result, it confirmed it is "pursuing a capital restructuring, fund raising and thereafter a listing" and claimed the "resulting combination of substantial scale, robust capital strength, strong cash generation and listing should cement Pearl's position as the pre-eminent scale closed fund consolidator in the UK market".

Pearl said discussions to raise new equity are in the "advanced" stages with investors, while talks with lenders regarding the possible restructure of existing capital are "ongoing and Pearl hopes that they will be completed shortly".

It acknowledged the changes, in particular the restructuring, "are subject to agreements its lenders, approval of the FSA and certain other conditions", but added once these had been met it would use the additional funds "in due course, to pursue further acquisition opportunities".

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