Life Settlement Assets PLC on Wednesday said Acheron Portfolio Trust completed the $24 million acquisition of life policies from Mutual Benefits Keep Policy Trust, while providing an update on its maturities aggregate value and net asset value.
Life Settlement is a closed-ended investment company which manages portfolios of whole and fractional interests in life settlement policies issued by life insurance companies operating predominantly in the US.
It said it completed the life policies acquisition by resolving its dispute with Mutual Benefits. It also noted several benefits arising from the acquisition for itself.
These included mitigation of a ‘significant operational risk’ with fractional interests in policies now able to be consolidated into policies 100% owned by Acheron together, alongside an uplift in valuation; a ‘significant’ future reduction in ongoing legal costs incurred by Life Settlement; and the resumption of dividend payments, which it said was evidenced by the payment of 6.0209 US cents as a special dividend on February 24.
Life Settlement also said its portfolio experienced a number of ‘sizeable’ maturities since the start of the year with an aggregate value of $6.6 million. It also said it expects these developments to add a total of $4.3 million in NAV for the company, which will be reflected in its figures as of January 31 when released to the market ‘in due course’.
‘I am pleased with the successful resolution of the litigation and the resulting reduction of litigation costs and improved risk profile for the company,’ said Chair Michael Baines.
In early March, Life Settlement said a US federal district court judge approved the magistrate’s report on the sale of a $24 million portfolio of life policies to Acheron.
It said the proceeds of the sale of its Mutual Benefits portfolio will be distributed to Mutual Benefits’ investors, net of all transaction, legal and wind-down costs. This is currently anticipated to be around $5 million, according to the Mutual Benefits trustee.
Life Settlement said the face value attributed to the portfolio was around $167 million, as of December 1, of which around 63% is attributable to Acheron’s interests.
Shares in Life Settlement closed down 0.6% to $1.55 each in London on Wednesday.
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