(Alliance News) - Over-50s travel operator Saga PLC is seeking buyers for its in-house insurance underwriting business, hoping to raise GBP90 million to pay down debt, the Sunday Times reported.
The newspaper noted that Saga would continue to offer home and motor insurance to its customers, but would move the risk associated with those policies elsewhere.
The Times said Saga is being advised on the potential sale by City broker and investment bank Numis Corp PLC.
https://www.thetimes.co.uk/article/saga-seeks-to-raise-90m-to-cut-debt-tzjnslkbc
The underwriting business made underlying pretax profit of GBP16.4 million in the six months that ended July 31 last year, halved from GBP31.1 million a year before, hurt by inflation in motor damage claims. The combined operating ratio of the business was 110%, with a reading above 100% indicating a loss on underwriting.
Saga reported net debt of GBP721.3 million as of July 31, which is more than triple the company's current stock market value of GBP210.6 million.
By Tom Waite, Alliance News editor
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Saga (SAGA)