Acquisition reflects continued growth in electricity business

Centrica plc today announced that Goldfish Bank Ltd has reached agreement to sell to Lloyds TSB for cash the Goldfish credit card, personal loan business and associated business assets for a premium of £112.5m or around 14% of net credit card receivables as at 30 June, 2003. The transaction also includes the Goldfish brand and loyalty programme.

Centrica and Lloyds TSB have economic interests of 70 per cent and 30 per cent respectively in Goldfish Bank. The consideration will ultimately be distributed on a pro rata basis to Centrica and Lloyds TSB following an orderly closure of the bank’s activities.

In addition, Goldfish Bank will receive from Lloyds TSB an amount equal to the net book value of the finance receivables as at completion of around £900m, such monies to be applied in repayment of Goldfish Bank’s customer deposits and bank loans.

Centrica believes this agreement will deliver the best long term value for its shareholders. Goldfish remains a sub-scale business operating in an increasingly competitive market and a tight regulatory climate. A sale to Lloyds TSB avoids very significant costs in migrating customers from Goldfish which would have been incurred under a sale to a third party.

The Goldfish credit card and its associated loyalty scheme were originally developed as a customer retention initiative within the group’s energy supply business. Since then, Centrica has retained its position as the UK’s leading household gas supplier and transformed itself into the leading domestic electricity supplier, with an overall household energy market share of around 41 per cent. Goldfish credit card holders will continue to be able to redeem their loyalty points against British Gas bills.

Sir Roy Gardner, Chief Executive of Centrica, said: "Centrica has a rigorous approach to managing its businesses for value. Goldfish has developed into a very strong brand but we believe that the capital investment required to achieve the necessary scale would be better directed towards our core businesses."

The transaction is expected to complete in the fourth quarter of 2003.