Standard & Poor’s Ratings Services announced that that its “BBB+”-outlook negative – ratings on Netherlands-based insurance group Eureko B.V. are unaffected by the group’s announcement of an agreement with Friends Provident PLC to combine their asset management activities.
“The negative outlook on Eureko’s ratings continues to be driven by concerns over the group’s ability to deliver substantial and sustainable earnings improvements in 2004 and beyond,” said S&P. “Eureko will retain a significant minority position of about 21 percent in the newly created asset management group, which will retain the F&C brand, while Friends Provident will become a majority shareholder with a 51 percent stake.”
S&P observed that “as a result of this transaction, Eureko will achieve its stated objective of effecting a listing for F&C and unlock a significant capital investment from its non-core activity as well as realize a substantial financial gain on the sale of its stake in F&C. This is viewed as a positive development for Eureko’s capitalization level.”
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