British holidays group Saga is in discussions to sell Acromas Insurance Co, the underwriting unit of its wider insurance division, to help pay down its debt.
Saga’s insurance division – the largest business of the group – has been grappling with rising claims, which led to a half
AJ Bell’s Russ Mould said: “Over 50s travel, leisure and insurance group Saga has run aground in recent years as its cruise business struggled in the pandemic and as a series of managerial and operational mis-steps have knocked it off course.
“In theory the business should be on to a winner by targeting a relatively affluent demographic which is growing in size but the 90% fall in the shares since listing in 2014 speaks to how badly this opportunity has been messed up. As it seeks to fix a balance sheet which is looking a bit creaky, the company is planning to sell its insurance underwriting business.
“Much of this function was offloaded to third parties a while ago anyway so this feels like quite a logical move, but how much the company might raise through any sale and how much of a dent it would make in a £700 million-plus debt pile is open to question.”