TIDMOML
RNS Number : 1824G
Old Mutual PLC
25 May 2017
Old Mutual plc
Ref 115/17
25 May 2017
Old mutual plc annual general meeting
Old Mutual plc will be holding its Annual General Meeting at
11am (UK time) today, 25 May 2017. At the meeting, Chief Executive
Bruce Hemphill will give an update on trading for the year and an
update on the managed separation. On 11 April 2017, we published
the Old Mutual plc Annual Report & Accounts which includes risk
disclosures.
Old Mutual plc Chief Executive Bruce Hemphill said: "We are very
pleased with the progress we have made since announcing managed
separation. We have said we would create four independent
businesses, and with the recently announced transactions in respect
of OMAM, that business is now independent.
"We are aiming to complete the two listings that will materially
deliver the managed separation at the earliest opportunity in 2018
after our full year results, subject to regulatory and other
approvals."
Operational update
Old Mutual plc no longer reports on a quarterly basis. OM Asset
Management ("OMAM"), Nedbank Group ("Nedbank") and Old Mutual
Wealth ("OMW") have made their own public announcements in respect
of business performance for Q1 2017 and outlook for the rest of the
year. In addition, on 2 May 2017, OMW announced it had terminated
its contract with IFDS for the UK Platform transformation programme
and contracted with FNZ to deliver platform and outsourcing
services and provided updated guidance on timing and costs.
On 3 April 2017, we announced the appointment of Peter Moyo as
Chief Executive of Old Mutual Emerging Markets ("OMEM"). Peter has
deep financial services experience, having been CEO of Alexander
Forbes from 2005 to 2008 and prior to that Deputy Managing Director
of Old Mutual South Africa from 2000 to 2005, having joined as
divisional manager in 1997. He is currently the non-executive
Chairman of Vodacom Group, a leading African communications
company.
In relation to OMEM, the tough macro-environment in South
Africa, exacerbated by the sovereign downgrades, has meant that our
customers continue to face financial challenges. This has
contributed to April year-to-date gross sales and NCCF tracking
below prior year as well as a slight deterioration in persistency.
We have however seen an improvement in underwriting experience in
both P&C and our Corporate book, following management actions
taken and continue to manage expenses tightly. OMEM continues to
have expectations for moderate full year earnings growth.
Strategic update
The managed separation strategy we announced on 11 March 2016 is
expected to deliver value through the removal of London head office
central operational costs, by unlocking the conglomerate discount
and by delivering enhanced performance of the underlying
businesses. We believe that the current structure inhibits
efficient funding of future growth plans for the individual
businesses, restricting them from their full potential. Following
the managed separation, the lead regulator for each business unit
will then be the same as the local regulator. Implementation
requires a balance to be struck between value, time, cost and risk
relative to our broad stakeholder interests.
Since our update on managed separation progress on 9 March 2017,
we have taken a number of other significant steps:
-- On 25 March 2017, we announced that we had agreed to sell a
24.95% shareholding in OMAM to HNA Capital US in a two-step
transaction for gross cash consideration of approximately $446
million. The first tranche of the two-step sale of OMAM shares to
HNA Capital US has completed. The first tranche consisted of 9.95%
of OMAM for a price of $15.30 per share resulting in gross proceeds
of approximately $175 million. We expect completion of the second
tranche which is subject to receipt of certain additional
regulatory approvals to take place in the second half of 2017.
-- On 27 April 2017, we announced that we had agreed to sell our
26% stake in Kotak Mahindra Old Mutual Life Insurance Limited to
our joint venture partner, Kotak Mahindra Bank Limited. The gross
consideration for the transaction was INR 12,927 million (GBP156
million equivalent based on the spot exchange rate on the day of
announcement) and is in line with OMEM's revised strategic focus on
sub-Saharan Africa.
-- On 16 May 2017, we announced that we had conducted a
secondary offering of 17.3 million shares in OMAM at a price to the
public of $14.55 per share and entered into a repurchase agreement
with OMAM for a further 5 million shares also at $14.55 per share.
Old Mutual will realise proceeds less the underwriting discount
from the offering and repurchase transactions of $321.9 million.
Following the sale, Old Mutual now holds 22.4% of OMAM.
-- At our preliminary results in March, we highlighted that we
hold cash and liquidity buffers centrally to support the plc under
both normal and stressed conditions. This was inclusive of GBP200
million of undrawn support for OMW. These liquidity buffers and
cash will transition from plc Head Office where appropriate as part
of the preparations for the independence of the unlisted
subsidiaries. In an initial step in this process we have
contributed GBP200 million of capital into OMW with a consequential
reduction in plc's liquidity support and centrally held liquidity
buffers for OMW of GBP130 million.
Our cash and liquid assets position as at end of April was
GBP586 million and on a pro-forma basis, allowing for the completed
transactions described above was approximately GBP750 million. The
impact of business activity and completed corporate transactions
year-to-date has increased the Group's Solvency II ratio since year
end by circa 5%.
As previously guided, there are significant actual and potential
demands on our cash and liquidity during the managed separation and
plc wind down. As we proceed with the next steps of our managed
separation strategy, cash utilisation will continue not only for
the current plc structure, but also the resolution of contingent
liabilities and managed separation and business readiness costs
across the plc head office and the underlying businesses.
We have previously stated that the managed separation would be
materially complete by the end of 2018. To that end, we intend to
pursue one or more transactions which will ultimately deliver two
separate entities, listed on both the London and Johannesburg stock
exchanges, into the hands of Old Mutual plc's then shareholders.
One will consist principally of the OMW operations and the primary
means of achieving this outcome is likely to be through a demerger,
with the possibility of a small Initial Public Offering.
There will be a new South African holding company, to be named
"Old Mutual Limited", which will initially consist of OMEM, the
Group's Nedbank shareholding and Old Mutual plc. Old Mutual plc is
considering all its options with regard to its cash, debt and
contingent liabilities, taking into account the cash proceeds from
disposals and requirements of the standalone balance sheets of the
subsidiaries. These options include retaining debt in Old Mutual
plc after the point of separation.
The timing for the next stage of managed separation will in part
be dependent on receipt of the required regulatory approvals but we
currently anticipate the listing of OMW and the South African
holding company to take place at the earliest opportunity in 2018
after Old Mutual plc's 2017 full year results. The subsequent
distribution of a significant proportion of the shareholding in
Nedbank from Old Mutual Limited would follow in due course, and in
an orderly manner, as previously announced. Old Mutual Limited will
retain an appropriate strategic minority shareholding in Nedbank to
underpin the ongoing commercial relationship.
Reporting timetable
Old Mutual expects to report next to shareholders on 11 August
2017 with its Interim Results.
Enquiries
External communications
Patrick Bowes +44 20 7002 7440
Investor relations
Dominic Lagan +44 20 7002 7190
Deward Serfontein +27 82 810 5672
Media
William Baldwin-Charles +44 20 7002 7133
+44 7834 524833
Notes to Editors
Old Mutual provides investment, savings, insurance and banking
services to 19.4 million customers in Africa, the Americas, Asia
and Europe. Originating in South Africa in 1845, Old Mutual has
been listed on the London and Johannesburg Stock Exchanges, among
others, since 1999.
Old Mutual is executing its strategy of managed separation,
which will entail separating its four businesses into standalone
entities. The four businesses are:
Old Mutual Emerging Markets: an attractive business with a
dominant position in South Africa, well-placed to capitalise on
sub-Saharan African growth as a diversified financial services
provider with strong operations in key East and West African
markets.
Nedbank: one of South Africa's four largest banks with very
strong corporate, commercial and property finance franchises, and a
growth opportunity in the retail market, as well as pan-African
optionality through its stake in Ecobank Transnational Inc
(ETI).
Old Mutual Wealth: a leading, integrated wealth management
business, focused on the UK upper and middle market, with strong
prospects in a rapidly growing GBP3 trillion market.
OM Asset Management: an institutionally focussed, multi-boutique
asset management business, delivering strong, diversified growth in
attractive asset classes through organic initiatives and
acquisitions.
For the year ended 31 December 2016, Old Mutual reported an
adjusted operating profit before tax of GBP1.7 billion and had
GBP395 billion of funds under management. For further information
on Old Mutual plc and the underlying businesses, please visit the
corporate website at www.oldmutualplc.com
The company news service from the London Stock Exchange
END
AGMLIFFEEIIEFID
(END) Dow Jones Newswires
May 25, 2017 02:02 ET (06:02 GMT)
Old Mutual (LSE:OML)
Historical Stock Chart
From Apr 2024 to May 2024
Old Mutual (LSE:OML)
Historical Stock Chart
From May 2023 to May 2024