Lloyds sells buying spree assets

The part-nationalised bank said it was selling around 70 per cent of the portfolio to a joint venture with private equity firm Coller Capital for 332 million, valuing the assets at 480 million - a "small premium" to the current market price, according to Lloyds.

But the portfolio, which is said to have been up for sale since 2008, is widely blamed for many of the financial woes at HBOS, which bought the assets at the height of the market.

It includes Keepmoat, the Doncaster social regeneration company, which was the subject of the biggest buyout on record in Yorkshire in 2007 with backing from the Bank of Scotland's integrated finance (BOSIF) division.

The portfolio also includes minority stakes in 40 investments covering an array of British businesses, such as Sir Terence Conran's restaurant empire D&D, gym chain David Lloyd and newsagent and convenience group Martin McColl.

Lloyds, which will hold a 30 per cent stake in the joint venture, confirmed Coller will retain the former HBOS team responsible for snapping up the assets, led by Graeme Shankland.

A spokesman for the bank said the decision to keep them on was made by Coller for "continuity to get the best out of these assets".

But it is understood Lloyds has negotiated strict terms and conditions in contracts with the former Bank of Scotland integrated finance employees over any future bonus payments.

Lloyds has now raised more than 750 million from asset sales to shore up its finances following the rescue of HBOS and subsequent taxpayer bail out.

However, it still holds the ill-fated property and housebuilding portfolio, which has also landed the group with hefty writedowns since the credit crunch.

It said today's deal will enable it to realise value immediately in the assets being sold, while also taking part in any future profits from the venture through its retained stake.

Coller - chosen as partner after a competitive bidding process - indicated there would not be any firesale of the stakes.

Jeremy Coller, chief investment officer of Coller, said the group would work with Lloyds to ensure the investments "get access to the resources they need to reach their full potential".

Analyst Bruce Packard at Seymour Pierce was critical of the deal. He said: "We wouldn't see a disposal at a small premium to 'book value' as a positive.

"Presumably the investments were written down aggressively in the first half of last year, when Lloyds took a 13.4 billion impairment charge for HBOS assets which were 'outside the traditional Lloyds low-risk appetite'."