Two groups of creditors at Towergate have agreed a new deal to inject more cash into the troubled insurance giant without wiping out its lower level bondholders.

Unsecured creditors will become majority shareholders in the company after agreeing to put another £50 million into the business and pay senior secured creditors £250 million.

The group – led by Highbridge, KKR and Sankaty Advisors – now owns more than 80% of the firm, which announced a restructuring last week wiping out 60% of its £1bn debt and injecting £75 million into its cashflow. This remains in place.

The latest development saves junior bondholders from losing out entirely on their investment in the business, based at Eclipse Park in Maidstone, which ran into trouble after a debt-funded acquisition spree over many years.

Towergate chairman Alastair Lyons said: “I am very happy that a consensual agreement has been reached between our senior creditors.

“This further agreement brings the very difficult last few months to an excellent conclusion.

“This further agreement brings the very difficult last few months to an excellent conclusion..." - Chairman Alastair Lyons

“The company now has a highly committed shareholder base that has demonstrated its strong belief in the potential of our business by the extent of their investment.

“The company has a strong balance sheet, having substantially reduced its debt burden, and has almost halved its interest bill.

“Taken together with the new funds being invested, this gives the company a strong positive cash flow to support the completion of the change programme and the further growth of the business.”

Advent, the private equity firm which invested £200 million in Towergate in 2011, is not a part of the latest restructure and has written off its losses.

The deal also brings to an end founder Peter Cullum’s financial stake in the business, who became one of Kent’s richest men not long after he launched the business in 1997.

The new majority shareholders added: “We are excited about working with the Towergate team.

“This joint agreement provides the best guarantees for Towergate’s employees, insurer partners and customers.

“This agreement brings long-term financial strength and stability, and outlines a compelling strategy to strengthen Towergate as a leading UK insurance broker.”

Preliminary financial results for Towergate last year showed a 4% decline in income last year to £426 million.

Earnings before interest, taxes, depreciation or amortisation fell by 24% to £110 million.

The company, which handles more than £2 billion of premiums, employs about 5,000 staff at 120 offices including its Maidstone HQ, Sevenoaks and Whitstable.