LONDON (Alliance News) - Xchanging PLC Wednesday said that it is taking full control of its joint venture with Allianz Global Investors Europe GmbH, signing an agreement triggering the exercise of a put option held by its partner that will give it complete ownership of investment account administration business, Fondsdepot Bank GmbH.
Xchanging is paying AllianzGI EUR13.6 million in cash on exercise of the put option, the amount originally agreed when the FdB joint venture was created. The payment is being made by using the company's revolving credit facility.
A EUR20.0 million letter of credit issued in favour of AllianzGI will also be terminated following the deal with the notional amount being added back to the debt facility headroom. In addition FdB will make a one-off cash payment of EUR4.0 million into a trust over existing pension entitlements owed to FdB employees.
The news comes after Xchanging in May said that it was in exclusive discussions with AllianzGI regarding ownership of FdB, with today's agreement completing that process in a move Xchanging said simplifies its business.
"We are investing in Fondsdepot Bank to improve its business performance and enhance its position and growth potential in the market. Gaining full ownership simplifies the business structure and, through the account transfer, we are delighted to extend and strengthen Fondsdepot Bank's relationship with AllianzGI into the foreseeable future," Xchanging Chief Executive Ken Lever said in a statement.
As part of the deal, all customer accounts administered by FdB, but contracted with AllianzGI under a service contract due to expire in October 2015, will be transferred to FdB ownership in June 2015. Xchanging is to provide an updated customer portal, and adjustments are being made to the ongoing fee arrangements with AllianzGI.
AllianzGI's Chief Operating Officer Europe Michael Peters said that the company is pleased to renew and extend its commitment to Xchanging and Fondsdepot Bank.
"We are excited about the development of the platform and the investments in FdB's technology, which will improve customer experience and thus be supportive to our growth strategy," he said.
Xchanging shares were Wednesday quoted up 2.7% at 181.75 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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