Hastings Direct flotation set to create a bumper payday for 1,500 employees

Neil Utley, the veteran City tycoon, is set to see his stake in Hastings Direct valued in the region of £200m as part of the upcoming stock market flotation of the motor insurer.

The Telegraph are reporting that the stock exchange listing will trigger the second sizeable payday for Utley from the business after he made approximately £135m by selling a 50 per cent stake to a division of Goldman Sachs in 2013.

The Wall Street bank invested around £150m as part of the deal, but just two years on, Hastings Direct could be valued at up to £1bn in a stock market flotation expected after the general election.

Around 80 per cent of the insurance company’s 1,500 staff are also expected to share in the potential payout as they own about 5 per cent of the company, which could equate to as much as £41,000 each.

The company, based in Bexhill, East Sussex, has already hired bankers at Goldman Sachs and Credit Suisse to advise on the listing process. Sources said, however, that it remains unclear exactly how many shares will be sold as part of the process.

Mr Utley continues to own around 20 per cent of Hastings Direct after he led the management buyout of the business in 2009 from Insurance Australia Group, where he was a director.

A group of directors — including non-executive chairman Edward Fitzmaurice, non-executive director Richard Brewster and director Keith Charlton — are said to own around 30pc between them.

Hasting Direct’s chief executive, Gary Hoffman, who led the turnaround of Northern Rock, also owns a slice of shares along with senior staff.

Hoffman turned down a £350,000 state-funded payout when he quit the bank to join NBNK, which failed in its bid to buy the 632 branches Lloyds Banking Group had been ordered to sell by the European Commission.