TWR
01/07/2014 08:30
ASSET
REL: 0830 HRS Tower Limited
ASSET: TWR: TOWER sells remaining Life business to Foundation Life
1 July 2014
Market Information
NZX Limited
Level 2, NZX Centre
11 Cable Street
Wellington
New Zealand
Company Announcements Office
Australian Stock Exchange Limited
Exchange Centre
Level 6, 20 Bridge Street
Sydney NSW 2000
Australia
TOWER sells remaining Life business to Foundation Life
(Auckland, NZ) TOWER Limited today announced that it has sold its remaining
life business, TOWER Life (N.Z.) Limited to Foundation Life (NZ) Holdings
Limited ("Foundation Life"), subject to conditions precedent including
regulatory approvals. The aggregate value of the transaction is $36 million.
Foundation Life is a private company that is focused on the acquisition and
long term prudential management of life insurance portfolios which are no
longer being actively marketed.
TOWER Life (N.Z.) Limited comprises TOWER's residual "run-off" life business
including a participating book, annuity business, unit linked book and a
small amount of traditional non-participating term insurance. TOWER Life
(N.Z.) Limited had total assets of more than $700 million as at 31 March
2014.
TOWER Chief Executive Officer David Hancock said today the sale reflected
TOWER's new focus as a pure-play general insurer, and its commitment to
delivering value to shareholders.
"TOWER is committed to delivering attractive shareholder returns by growing a
general insurance business that is a leading light in New Zealand and the
Pacific. We see opportunities for growth and are very focused on increasing
our market share in general insurance, particularly in key personal lines.
TOWER Life (N.Z.) Limited has performed well and delivered solid results, and
we expect the business to continue to flourish under new ownership."
Although TOWER had made the decision to retain TOWER Life (N.Z.) Limited in
January this year, Mr Hancock said it had continued to receive approaches and
assessed these against the potential shareholder value that could be
delivered.
"Foundation Life came to us with a proposition that recognised appropriate
value for shareholders," he said.
The prospective Chairman of TOWER Life (N.Z) Limited, David Harrison, said
"the Foundation Life team is looking forward to working with the many
stakeholders, including policy holders and staff, to further strengthen and
improve the business."
Mr Hancock said TOWER Life (N.Z.) Limited has many long-term and loyal
customers who are very important to the business. "There will be no changes
to their existing policies under Foundation Life."
The consideration will be satisfied with $34 million payable upon completion
and a further $2 million payable two years after completion.
Mr Hancock said TOWER continues to invest in customer service, technology and
new products in its core general insurance business in New Zealand and the
Pacific, which provide attractive growth opportunities.
"The sale of the remaining life business will add to our capital reserves
that remain well above regulatory requirements and our own long-term targets.
Beyond the sale of these life assets, the substantial completion of the
Canterbury rebuild at the end of 2015 should release further significant
capital. As we said at the time of the first half results, the company will
consider further capital returns to shareholders where possible."
Any TOWER Life (N.Z) Limited customers with queries can call TOWER on 0800
808 808 (push 3 then 3) or alternatively, can email [email protected] for more
information.
The sale of TOWER Life (N.Z.) Limited is subject to approval by the Overseas
Investment Office and the Reserve Bank of New Zealand and is otherwise on
terms and conditions customary for a transaction of this type. Subject to
satisfaction and timing of conditions, settlement is likely to occur in
August 2014.
ENDS
Michael Boggs
Chief Financial Officer
TOWER Limited
ARBN 088 481 234 Incorporated in New Zealand
For further information, please contact:
Tracey Palmer
Head of Corporate Communications
TOWER Limited
Tel: + 64 21 837 860
Email: [email protected]
End CA:00252245 For:TWR Type:ASSET Time:2014-07-01 08:30:15
