(Alliance News) - Chrysalis Investments Ltd on Friday said it was working to ensure a path toward profitability for its investee company wefox Insurance AG, following reports that the company was in dire financial trouble.
Chrysalis is a Guernsey-based investment firm. Its portfolio company wefox is a Vaduz, Liechtenstein-headquartered digital insurance platform.
The announcement was made in response to a Sky News article published on Thursday, which cited a wefox shareholder memo saying that the company could face insolvency by August.
Chrysalis said that its investment manager has been in discussions with wefox for several months regarding the company's future.
"A plan has been put in place to simplify wefox's business model to drive the company towards profitability", Chrysalis said. "Following these conversations, the investment adviser believes there is a route to ensuring a successful outcome for wefox and Chrysalis's investment."
Chrysalis said the value of its investment in wefox had reduced to 14% of its net asset value at March 31 from 22% at December 31.
Chrysalis said that it recently contributed EUR3 million to a EUR20 million shareholder fundraise by wefox.
"The investment adviser continues to consider how best to support wefox achieve its ambitions and is confident of continued shareholder support for the company, if required", Chrysalis said.
Shares in Chrysalis were up 1.8% at 78.70 pence each in London on Friday morning.
By Hugh Cameron, Alliance News reporter
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Chrysalis Inves (CHRY)