Renold (LSE:RNO)
Historical Stock Chart

From Apr 2019 to Apr 2024

TIDMRNO

RNS Number : 6477L

Renold PLC

29 April 2015

Renold plc

("Renold" or "the Company" or "the Group")

De-risking exercise for the Renold Pension Scheme

Renold, a leading international supplier of industrial chains and related power transmission products, announces a transaction to fully de-risk approximately 25% of current UK pensioner liabilities.

Medically underwritten insured buy-in

The Renold Pension Scheme (the Group's legacy Defined Benefit pension scheme in the UK) has completed a medically underwritten insured buy-in that fully de-risks approximately GBP25m (or 25%) of the current UK pensioner liabilities (1) in respect of the highest liability pensioner members (2) .

Attractive pricing terms, combined with the medical underwriting process, mean that the UK scheme was able to secure the liabilities at a small discount to their assumed funding valuation. The transaction is approximately neutral from an accounting valuation perspective and was structured as a 'buy-in' and hence the insurance policy remains an asset of the scheme. As a result, the transaction has no impact on the funding level of the scheme and did not require any additional contributions from the Group. Consideration for the buy-in will be sourced entirely from a portion of the scheme's holding of Index Linked UK Government bonds.

The most significant impact of the transaction on the Group is the de-risking effect on this section of current pensioner liabilities. The Group is now fully protected from volatility in longevity, inflation and interest rates in respect of these members. These factors will be relevant to future triennial revaluations and funding discussions with Trustees.

Robert Purcell, Chief Executive of Renold, commented:

"The buy in of 25% of current pensioner liabilities is an important step in de-risking the Group's cash flows and balance sheet from the impact of volatility in pension liabilities. Re-building the Group's balance sheet and closely managing our legacy pension obligations are important aspects of the Group's overall strategic objective to deliver sustainable gains in shareholder value."

29 April 2015

(1) Liabilities assessed on a scheme funding basis

(2) High liability members from a scheme perspective are those with higher annual pension incomes who represent a significant concentration of longevity risk for the scheme.

ENQUIRIES:

 
 Renold plc               0161 498 4500 
 Robert Purcell, Chief 
  Executive 
 Brian Tenner, Finance 
  Director 
 
 Instinctif               020 7457 2020 
 Mark Garraway 
 Helen Tarbet 
 

NOTES FOR EDITORS

Renold is a global leader in the manufacture of industrial chains and also manufactures a range of torque transmission products which are sold throughout the world to a broad range of original equipment manufacturers and distributors. The Company has a well deserved reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, steel and mining.

Further information about Renold can be found on the website at: www.renold.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCEASLNADPSEEF