Lloyds Banking To Get GBP332M Cash In Private Equity Venture

5th Jul 2010 07:32

By Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Lloyds Banking Group PLC (LYG) Monday said it will receive GBP332 million by selling a portfolio of private equity investments to a new joint venture in which it will keep a minority stake, as part of the 41%-state owned bank's plan to shrink its balance sheet by disposing of non-core assets. The 40 company stakes, held through its Bank of Scotland Integrated Finance unit will be transferred to a venture called Cavendish Square Partners LP, 70%-owned by private equity investor Coller Capital. Lloyds will hold a 30% stake in Cavendish. Coller's cash consideration values the portfolio at GBP480 million, Lloyds said, a small premium to book value. It said the holdings include investments in U.K. companies across sectors. Previous reports said it includes stakes in a number of U.K. high street companies such as Vue cinemas and coffee chain Caffe Nero. The sale had been well flagged in the press and was expected to value the portfolio at around GBP500 million. "Through this transaction, we are crystallizing value in these investments whilst retaining an interest in the investee companies with which we have had positive relationships for several years," said Truett Tate, group executive director of Lloyds' wholesale division. "This deal will ensure that we share in any future upside of our investments. We believe that the deal with Coller, a leading private equity investor, provides the investee companies with stability and support over the period ahead," he said. The current Lloyds management team will be retained in the venture. Lloyds said the sale represents its sixth disposal in the past year, helping it to raise more than GBP750 million. The bank fell into part-state ownership after massive capital injections in 2008 and 2009. Its shares closed Friday at 55 pence, up 3% on the day. -By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; [email protected] (END) Dow Jones Newswires July 05, 2010 02:32 ET (06:32 GMT)