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Towergate: Creditor Vs Creditor

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Towergate looks like it is having some financial issues, again - (fall in profits, large debts.. creditors owed £1billion+, and ye-olde 'irrelevant' liquidity) - but with some intrigue, as it puts vulture fund against vulture fund, and possibly shakes up some of the older participants who've been around from the beginning.

09 December 2014

Towergate’s struggles have been partly caused by an aggressive acquisition spree and huge interest payments on £1bn of debt. Last month it announced pre-tax losses of £112.7m in the nine months to the end of September, up from £19.1m during the same period last year.

http://www.kentonline.co.uk/kent-business/county-news/insurance-giant-begins-sell-off-28298/

Some of my recent fears has been US firms buying up global trophy assets, with QE reflated US money, to rebalance the US position over the longer term at expense of Rest of The World, money/profits flowing back to US companies - but it seems here some existing US firms may have gotten themselves a bit stuck with their previous involvement.

Just flicking through Sunday Times.. 28.12.2014

AN AGGRESSIVE New York buyout first has launched a bid for control of Towergate, opening a new front in the battle over the beleaguered insurance broker. Towergate, based in Kent, and employs 5,000 people, put itself up for sale last month after a catastrophic drop in profits.

Basically goes on to how there is now a scramble of positions going on, between creditors who've already taken positions in the company... 'stiff resistance expected from 3 US vulture funds'... names them... 'which bought £304m in junior loans that would probably get written off in a takeover'.. and new potential suitors looking to buy 'on the cheap'.

One other large US vulture fund already taken position buying senior loans (thus senior creditors), which could put it in a position to wipe out shareholders and junior lenders, if they move forward to buying in further on a debt-for-equity swap.

Cullen again mentioned... founded the business in 1997, 'buying dozens of regional brokers', not rich enough yet? 'Among those who stand to lose out is founder and deputy chairman Peter Cullum.. much of whose £450m net worth tied up in Towergate'. (Did the takeover of Charcol not add great value?). Advant International, private equity firm, has a majority stake (bought in 2010 it seems). Other bids in the works, and 'Cullum working on a rival management buyout.'

In contrast US banks have begun to rave about recovery. They love the debt they have issued.

Could be a strategic plan..maybe they like it that way, with US powering up. Allowing them to pick up European assets at distressed values to come.


Brokers start to turn away from Towergate
Mortgage Introducer-4 Dec 2014
Brokers are starting to turn away from insurance provider Towergate, the company behind Paymentshield and John Charcol, as rumours of ...

Towergate offloads aircraft cover unit
Financial Times-8 Dec 2014
Insurance broker Towergate has made the first of several expected disposals as one of Britain's biggest private companies tries to raise cash as ...

Towergate's bankers invite ownership bids
Financial Times-4 Dec 2014
Evercore wrote to holders of Towergate's senior unsecured debt on Thursday inviting them to take over the equity of the company, which has ...

Speculation rife over Towergate's future
Insurance Age-8 Dec 2014
Towergate's third quarter results and the seismic announcement that it is for sale while facing cash flow problems have dominated the news recently. It is, after ...

Moody's sends Towergate deeper into junk territiory
Financial Times-12 Dec 2014
Towergate's credit ratings have been downgraded for the second time in three weeks in the latest blow to the insurance broker as it fights to ...

Towergate up for sale as investors flee insurance broker ...
http://www.cityam.com/1416448611/towergate-sale-investors-flee-insurance-broker
20 Nov 2014 - Europe's biggest privately owned insurance broker Towergate is up for sale just a month after its boss Mark Hodges quit last month.

Towergate Insurance officially launches new Manchester base
Manchester Evening News-28 Aug 2014
The new Manchester office of Towergate Insurance has been officially opened by its chief executive Mark Hodges and Manchester City Council ...

Towergate and the liquidity issue
Insurance Age-21 Nov 2014
Towergate's management will be asking wide-ranging questions and considering many solutions as they battle to overcome the business's liquidity crisis ...

2009...2011

Figures from the debt markets show that Smurfit Kappa, a packaging manufacturer supported by HBOS loans, has its debt trading at 69% of its original value. Another firm, Towergate, an insurance group backed by HBOS and Lloyds, has breached covenants and is struggling to repay its debts.

http://www.guardian.co.uk/business/2009/fe...yds-hbos-merger

Wow, I want to help please give this firm more of my tax money and give the star bankers a big bonus so we can keep them to sort out the mess they have created.

Ponzi Brown has excelled himself with making Lloyds take on HBoS. It was like giving someone a hand grenade with the pin pulled out.

The govt should be brave and wipe out the banks and start again, however it won't it will throw more money at the problem because if they throw enough money at the problem they can fix it.

Towergate Financial bought John Charcol last night after it went into administration.
‘We believe there is an excellent fit between our business and John Charcol. We jointly have a great opportunity to offer financial planning and insurance solutions to Charcol's clients and vice versa,' he said.

Towergate Partnership chairman Peter Cullum (pictured above) said the deal would bring 100 new staff under the umbrella and safeguard the John Charcol brand. John Charcol is one of the highest profile brokers in the mortgage market, with its technical expert Ray Boulger regularly appearing in the mainstream media
http://citywire.co.uk/new-model-adviser/towergate-financial-rescues-john-charcol-from-administration/a384055

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We have mini versions in the UK:

Resolution trust who took in several billion to buy up distressed Life groups and returned about half the money poured in.

The UK life industry mid-80s to the 2000s is worth a few books on fraud, scams, stupidity.

And Quindell, which says 'insurance' on the tin but looks like 'massive fraud' on the inside.

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