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Insured Group looks to delists from NZX, targets fresh capital in Australia

Friday 13th April 2012

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Insured Group, the Australian insurer which used Lombard Group for a backdoor listing on the NZX, is now looking to delist from the New Zealand stock exchange as it seeks to raise capital in Australia.

The company plans to raise A$2.25 million through a listing on the ASX, which it says it needs to ensure its ability to continue trading. If it is successful in listing on the ASX and raising the funds, it will quit the NZX, it said in a notice for a special meeting.

In 2010, the company sought to raise up to $10 million through a placement of ordinary shares and/or the issue of redeemable convertible preference shares in New Zealand but received insufficient interest.

“The company profile has changed and it no longer has a real presence in New Zealand,” it said. “The board does not consider there is any merit in being listed on both the ASX and NZSX.”

Insured Group has called for a special meeting of shareholders in Perth and Wellington, where they will be asked to approve the capital raising and also to let it delist from the NZX. The meeting is scheduled for May 9.

The board said the rationale for quitting the NZX in favour of the ASX was due to the “very limited interest” in its previous capital raising effort and its limited local presence having divested its New Zealand assets.

Trading in the stock has been light, and it expects to face lower compliance costs in Australia having inadvertently breached NZX listing rules twice in the past two years.

The company needs to raise at least A$2 million through the issue of ordinary shares if it is to continue to meet its existing payment obligations, the notice said. The 5 million new shares will be offered at an issue price of 45 Australian cents a share, and will be available in Australia and New Zealand. That equates to about 21 percent of the company, and if existing investors don’t participate, their holdings will be diluted.

If it wins shareholder approval, Insured Group will appoint specialist stock-broker DJ Charmichael as the adviser for the offer.

In March, Insured Group was slapped with a $50,000 fine by the stock exchange supervisor after it failed to lodge its annual report in time. The late filing prompted NZX to suspend trading in the company from Oct. 10 to Nov. 25.

Last month, the company’s chairman Bill Jeffries resigned after his conviction for making untrue statements as a director of Lombard Finance & Investments. He is appealing the conviction.

Insured Group shares recently traded at 15 cents, valuing the company at $2.7 million. When Insured Group, then known as Australian Consolidated Insurance, took control of Lombard it was valued at some $18 million.

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