Egg narrows losses as sale process limps on

Egg narrows losses as sale process limps on

UK Internet bank Egg has narrowed first quarter pre-tax losses to £4.9 million from £15.7 million in Q1 2003, after cutting expenditure at its loss-making unit in France.

In the UK, Egg continued its solid progress, reporting £15 million in first quarter profits and adding 148,000 new customers. Egg France made a £15.8 operating loss, down from £19.6 million in the first quarter of 2003.

Egg chief executive Paul Grattong comments: "In France...we are managing discretionary expenditure tightly as we await the conclusion of the ongoing process whereby Prudential is considering proposals for its shareholding in Egg."

Gratton had no further news on UK insurer Prudential's plans to sell its 79% shareholding in Egg, first announced in January. The sale process has taken longer than expected as Prudential haggles with potential bidders over the value of the business.

Egg's inital valuation of £1.6 billion has been dented by the continuing problems in France and worries over unsecured liabilities following bankruptcy rule changes in the UK.

Pru chief executive Jonathan Bloomer says the insurer will drop plans to sell the business if it cannot achieve a decent price. Negotiation are ongoing, he says.

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