(Reuters) – Australia’s Link Administration Holdings (Link Group) said on Monday that it is in advanced discussions to settle a probe into its UK-based Link Fund Solutions (LFS) unit and to sell the firm to Dublin-based Waystone Group.
However, Link said that even if both sets of discussions were concluded, it would receive no net proceeds from the sale and warned of a near A$449 million ($308.4 million) non-cash impairment charge for the half year ended Dec. 31 2022 in relation to the troubled unit.
UK-based LFS was the authorised corporate director of fallen star manager Neil Woodford’s equity income fund, which managed billions of pounds before being suspended amid a political and public outcry in 2019, triggering an investigation by Britain’s Financial Conduct Authority (FCA).
The Australian share registry firm and the FCA said on Monday they were in advanced confidential talks aimed at settling the investigation into the management of the now-defunct LF Woodford Equity Income Fund.
The FCA said it is seeking to determine whether its proposed enforcement action against LFS can be resolved by agreement.
“To assist a potential resolution, the FCA has provided time for Link Group to realise assets, including Link Group held assets, to meet the FCA’s concerns,” the FCA said.
“We will provide a further update as soon as we are able to,” the FCA added.
LFS was the major pain point in a proposed A$2.47 billion buyout of Link Administration by Canada’s Dye & Durham, which fell through in September after it hit regulatory snags.
Link Group on Monday said it had extended an exclusivity period to Waystone on the sale to the end of March to allow it to conclude all regulatory and legal requirements.
Waystone said any acquisition of Link Fund Solutions is subject to successfully completing due diligence, detailed legal agreements, board and other approvals.
The FCA said in January 2022 that it was close to a decision on whether to take enforcement action against LFS based on its investigation into the circumstances relating the 3 billion pound ($3.61 billion) Woodford fund’s suspension in June 2019.
Link expects half-yearly operating earnings for 2023 before interest and tax of A$80.2 million, which sits at the top end of the guidance range.
($1 = 1.4558 Australian dollars)
($1 = 0.8316 pounds)
(Reporting by Jaskiran Singh in Bengaluru and Huw Jones in London; Editing by Lisa Shumaker and Diane Craft)
