The Bradstock Group announced to the Stock Exchange today it has agreed a settlement with the trustees of the group's pension scheme.
In September last year the deficit owing to the scheme was £14m. At the same time, the group showed a net deficit of shareholders' funds of £6.2m.
Key terms of the new settlement include an immediate payment from the company to the scheme of £480,000.
The company will also issue 3,333,323 new shares in the company to the scheme credited as fully paid at the nominal value of 5p per share, which represents 5% of the current issued share capital of the company.
Bradstock said a 15% share of its consolidated profit after taxation as adjusted, for five financial years, subject to a maximum amount of £2m, will be paid.
The group also said it will pay a 50% share of any net proceeds received by the group from the sale of the assets, business or share capital of Bantam Insurance Company, a wholly owned subsidiary of the company, or any dividend, other distribution or return of capital made by Bantam.
It will also pay a 35% share of Credit Write Backs released to the group during the five financial years up to and including the year ending 30 September 2006, subject to a maximum amount of £3.5m and after the deduction of a sum equal to 7.5% of the Credit Write Backs.
The company has agreed for the financial year ending 30 September 2002 to pay a minimum amount of £200,000 to the Trustees in respect of its entitlement to Credit Write Backs.
The group said its obligations under the settlement are to be secured by "fixed and floating charges on certain companies within the group".
The directors added that, in their opinion, on completion of the settlement the working capital available to the group will be sufficient for its present requirements - that is, for at least 12 months from today.
