Troubled fund manager Aberdeen Asset Management is to float its property investment arm in a bid to raise much-needed cash, it said today.
The company at the centre of the £12bn split-capital investment trust scandal believes the business could fetch a value of more than £100m.
Around half of the shares in Aberdeen Property Investors (API) may be sold to investors with the income used to “pay down borrowings”.
Shares in the group, weighed down by around £250m of debts, rose by more than 7% in early trading as investors welcomed the news.
The Scottish fund manager has concluded a strategic review that will see it focus on equities and fixed income securities such as bonds.
The group added it would also be shaking-up its cumbersome board structure to “improve internal communications and decision making”.
Aberdeen will cut the number of directors to 11 from 19 and create a new executive management committee to sit underneath the main board.
The 11-strong main board will have six non-executive directors including former Tory minister Sir Malcolm Rifkind and will be led by chairman Charles Irby.
Aberdeen chief executive Martin Gilbert will also chair the executive management committee alongside finance chief Bill Rattray.
API currently manages property assets with a value of close to £6bn in the UK, continental Europe and the Nordic region.
The business represents 26% of the value of Aberdeen’s assets under management and generated earnings of at least £10m in the year to September 30.
Aberdeen has been caught-up in the split-trust capital scandal where managers are alleged to have colluded to boost share prices in funds they oversaw.
Split-capital investments have different classes of shareholder, some benefiting from growth and others from income.
Several trusts collapsed after running into difficulties from the falling stock market, high bank borrowings and high-levels of cross holdings.
Aberdeen said it “has continued to trade profitably” despite the impact the scandal has had on investor confidence.
EGi News 01/11/02
