successfully completed the first phase of a capital raising
exercise targeting a minimum of A$660 million ($455 million) and a
potential maximum of A$890 million in new ordinary equity
capital.
The exercise is aimed at improving the
insurer’s regulatory surplus capital and reducing borrowings.
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AXA APH announced on 18 March that in the
first phase of the exercise it had raised A$500 million in a
placement of ordinary shares to unnamed new and existing
institutional investors including French insurer AXA.
AXA subscribed for shares worth A$266 million,
sufficient to maintain its stake in AXA APH at 53.1 percent.
Second capital-raising
phase
The fully underwritten placement of 175.4
million new ordinary shares was done at $2.85 per share and
represented an 11.5 percent discount to AXA APH’s closing share
price on 16 March, the day prior to the announcement of the
placement.
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By GlobalDataIn the second phase of its capital raising,
AXA APH’s will offer existing shareholders the opportunity to each
subscribe for up to A$10,000 worth of new shares through a share
purchase plan (SPP) underwritten to a minimum of A$75 million.
AXA APH’s capital raising exercise also
includes a top-up offer to certain eligible shareholders who would
otherwise have their stakes diluted by the A$500 million placement
and the SPP. If the maximum amount possible is raised via the SPP
and top-up offer, the total sum raised would be about A$890
million.
AXA APH intends to use the newly raised
capital to reduce its gearing ratio to 41 percent by repaying A$210
million of senior debt. Any additional amount raised above A$660
million will also be used to repay senior debt.
Following completion of the capital raising
exercise AXA APH estimates that its total assets above regulatory
capital requirements will be between A$900 million and A$1 billion,
up from A$500 million to $600 million at present and A$779m at the
end of 2008.
AXA APH reported a net loss of A$278.7 million
in 2008, compared with a net profit of A$638.7 million in 2007. The
2008 loss included a net investment loss of A$722.7 million and
negative non-recurring items of A$152.8 million.
The value of new business in 2008 totalled
A$498 million, with Hong Kong the largest source at HK1.2 billion
(A$223 million), up 6 percent compared with 2007. Australia and New
Zealand each recorded a 40 percent fall in new business to A$106.8
million and A$10 million, respectively. New business from other
Asian countries increased by 40 percent to A$157.9 million.
