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ASA Welcomes Expansion of IAG Share Purchase Plan

ASA welcomes expansion of IAG share purchase plan

Media release: Thursday, January 30, 2014


The Australian Shareholders’ Association today welcomed the decision by the board of Insurance Australia Group to ignore their own cap on applications for a Share Purchase Plan.

ASA engaged in detailed correspondence (see attached) with IAG over the terms of its $1.4 billion capital raising and was pleased that the board accepted all $236 million worth of applications, rather than sticking with the artificial $200 million cap imposed when the SPP offer was first announced.

See today’s announcement here: http://www.asx.com.au/asxpdf/20140130/pdf/42mcq3wxvvp62p.pdf

ASA Policy and Engagement Coordinator Stephen Mayne said ASA was expanding its advocacy around capital raisings following the billions of dollars that retail investors lost after the GFC through dilution caused by unfair capital raisings.
“ASA strongly believes that the fairest way to raise capital is through a renounceable entitlement offer with a single bookbuild at the end to fully compensate investors who don’t participate,” Mr Mayne said.

“However, we have to accept that selective institutional placements are lawful and when these happen, retail investors need to be able to apply for as many shares as possible on the same terms through a share purchase plan.”

“Whilst it is disappointing that only 4.26% or 32,000 of IAG’s 750,000 retail shareholders participated in the SPP, at $236 million it is one of the 10 largest completed by an ASX-listed company and we thank the IAG for board for expanding the offer.”

See attached for ASA’s detailed letter to the IAG board arguing against the $200m cap.


For further information
Stephen Mayne: ASA Policy and Engagement Coordinator
Stephenmayne@asa.asn.au 0412 106 241

Comments

this is a comment on the IAG news article, just to see where it ends up. If you find it, please let me know. Helen