22 Oct 2004
Update on closure of Egg France
On 13th July the Board of Egg plc (“Egg”) announced that it had begun to take the necessary steps to withdraw from the French market. On 1st October 2004, Egg announced that it had received an approach for its French unsecured lending business from Banque Accord and had granted exclusivity to conclude the agreement.
Today Egg announces that it has received the opinion of the French Works Council and has reached an agreement with Banque Accord to sell the unsecured lending assets of its French business for an amount expected to be up to €140 million (£96 million) in cash, depending on the value of the portfolio at the time of completion and potential costs that may be assumed by Banque Accord.
The sale will effectively transfer 66,000 unsecured lending customers and net assets which today total approximately €205 million (£141 million) to Banque Accord. It will therefore lead to a loss on disposal based on today’s portfolio valuation of €65 million (£45 million) which will be charged to the exit costs provision. Our expectations with regard to the total exit costs in France remain unchanged.
The transaction, which is expected to be completed during Q4 2004, remains subject to the fulfilment of certain regulatory approvals and other conditions.
Notes to Editors:
- Egg plc is the world’s largest pure online bank, providing financial services products through its Internet site and other distribution channels.
- Egg plc floated on 12 June 2000 and is listed on the London Stock Exchange. Prudential plc holds 78% of the share capital.
- In the year ended 31 December 2003 the entire French business reported an operating loss before tax of £89.1 million.
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