Kwik-Fit Group Limited has announced that it has agreed to sell its UK Insurance business (KFIS) to Fortis UK Limited for £215 million, a division of Belgium-based Ageas. The transaction is subject to the usual regulatory approval, but is expected to be completed in the third quarter of 2010. According to the company, the transaction marks the successful completion of a strategic review for the KFIS business announced in February 2010.

Proceeds from the sale will be used to repay debt which, together with funds injected into the business as part of the recently completed covenant reset exercise at the end of 2009, will reduce net bank debt to £486 million. In an official statement on the matter, company representatives said the move leaves the business “in a strong position to exploit growth opportunities in its core fast-fit businesses.” It will also go some way towards halting speculation that the company’s private equity owners (PAI) are looking to sell the entire business as the rumours themselves appear to have been based on the size of Kwik-Fit’s debts.