Promina solicits NZ share buyers

By KEVIN TAYLOR AND AGENCIES

Transtasman insurer and financial services company Promina Group plans listing on the New Zealand Stock Exchange as it floats its Australian and New Zealand operations.

Promina, formerly Royal & SunAlliance, said yesterday it was starting a pre-registration campaign for its New Zealand initial public offering.

The company, which changed its name in January, has previously refused to say which exchanges it would list on.

News Promina would list in Australia and New Zealand came only in the annual result of its British parent, Royal & SunAlliance group, issued yesterday.

In November, Royal & SunAlliance announced plans to sell the majority of its Asia-Pacific operations through an IPO.

In December it said only the Australian and New Zealand operations would be included.

New Zealand investors will have the opportunity to pre-register for its share offer from tomorrow. The deadline for registrations is March 28.

Investors who pre-register will receive an investment statement in April, which will include the prospectus and an application form.

Promina owns more than 28 insurance and financial services businesses and brands, including Royal & SunAlliance, AA Insurance and Guardian Trust in New Zealand, and AAMI, Australian Pensioners Insurance Agency, Shannons, Tyndall, and Royal & SunAlliance Insurance in Australia.

It employs 1450 staff in New Zealand and 4800 in Australia, and has combined gross written premiums of more than A$2.5 billion ($2.7 billion).

Promina customers who pre-register and decide to invest will get preference in allocation over general applicants, and a guaranteed allocation of at least $5000 worth of shares at the retail price. That could be scaled back if the issue is over-subscribed.

Pre-registered non-customers who decide to invest will also get preference in allocation, and receive a guaranteed minimum allocation of $3500 worth of shares.

Retail investors will also get a discount on the final offer price.

Industry sources in Australia say the group could raise more than A$2 billion ($2.17 billion) from the float, making it the biggest planned for Australia this year.

Australian Promina customers will receive a minimum allocation of A$5000 worth of shares at the retail price if they pre-register and decide to invest. Non-customers will get a minimum allocation of A$3500.

AAMI, one of Australia's biggest motor vehicle insurers, is the jewel in the crown of Promina's business there. It also owns the Australian Pensioners Insurance Agency.

It failed to find a trade buyer for the businesses after more than a year of trying to sell following a wave of consolidation in Australia's insurance industry.

Royal & SunAlliance has not said whether its mortgage business would be included in the float after failing to find a buyer in a separate sale bid this year.

Analysts and fund managers say the IPO's success hinges on pricing, which they warned could be driven down by combining a strong general insurance arm with a weaker life insurance unit.

Loss of $2657m

London-based Royal & SunAlliance Insurance Group yesterday announced a loss of £940 million ($2657 million) for the December 31 year compared with a £889 million loss the previous year. Revenue fell from £8.8 billion to £8.6 billion.

Royal & Sun cut its 2002 dividend to 6 pence a share (16p in 2001) to save £141 million, acting chief executive Bob Gunn said.

The company had 9 per cent of its assets in equities on December 31, down from 20 per cent 12 months earlier.

Royal & Sun in November said it would sell businesses and eliminate up to 12,000 jobs to find the £600 million needed to pay claims and back new business.