Lexus Finance has announced plans to make its €1.4bn loan to the Irish insurance company Illiana Financial a fully-franchised one.
The plan, announced in a letter to shareholders on Wednesday, is a “game changer” for the insurance company which is facing an uncertain future.
The new arrangement will see the company continue to make loans and invest capital in the company’s insurance business, while also making a substantial financial contribution to the company.
It comes after years of uncertainty for the Irish insurer which has seen its shares fall to as low as €1 on the London Stock Exchange.
Lexus Finance is looking to bring in €400m of capital to support the company, with its latest investment of €100m to support Illiana Insurance.
The loan will come with an initial maturity of 30 years and will grow to 30 years on the final repayment.
The loan will also be fully subordinated to Illiana’s debt, meaning that Lexus will receive the full amount of the debt on every sale.
Lexes loan is also a significant investment in Illiana, with the company expecting to grow its insurance business by up to 25 per cent to €2.2bn in the next three years.
“The loan from Lexus is the largest ever made by an Irish insurer to a UK-based insurance company, and will enable us to continue to operate at our current scale for many years to come,” Illiana said in a statement.
“We are extremely proud of this investment and look forward to using it to build the future of the Irish insurers market and ensure that the Illiana insurance market continues to thrive.”
Lexus also announced it is launching a new online business to deliver insurance products to consumers.
The company is also planning to establish an Ireland-based customer service centre in Dublin to help with the rollout of the products.
“This new business will deliver services to our customers and ensure their shopping experience is as seamless as possible,” Lexus said in its press release.
“Our customers want our services, we want their shopping, and our customer service centres are the best way to deliver those services.”