Promina to sell Vero Mortgages for A$220m

Promina Group today announced it had agreed to sell Vero Lenders Mortgage Insurance (VLMI) to Genworth Financial Mortgage Insurance Pty for about A$220 million ($263m).

The sale price is about A$25m above the book value of VLMI, Promina said.

When it listed three years ago, Promina chose to discontinue the operations of this business and since April 2003 VLMI ceased to underwrite insurance policies and has been in "run off mode".

"Our view is that while this has been a profitable business for us, it is in the best interests of the business to be managed by a company that is an active participant in the sector, and which has ongoing scale in the market place," Promina chief executive Michael Wilkins said.

Settlement of the sale is subject to, among other conditions, Australian Competition and Consumer Commission approval and is expected to complete in early July.

Promina shares closed here at $6.89 yesterday. They have traded between $4.87 and $7.29 in the last year.

- NZPA