23 November 2002
Insurance Australia Group (IAG), owner of State Insurance in New Zealand, got a lukewarm response from small investors to its quest for $A380 million in equity to buy CGI (Commercial General) and NZI, achieving only a 24.5% ($A93 million) retail takeup. NRMA Insurance Ltd, the IAG subsidiary which bought State, launched 2 redeemable 5-year subordinated notes issues totalling $A300 million this week, to refinance a bridging facility for the purchase of CGI and NZI from Aviva plc. 1st part of the $A1.8.55 billion purchase programme was an $A500 million institutional placement. IAG plans an $A160 million dividend reinvestment plan for early 2003 as another part of the funding package.
John Dillon, chairman of the US Business Roundtable & chief executive of Carter Holt Harvey’s controlling shareholder, International Paper, said a majority of chief executives in a recent Roundtable survey had grave concerns about their ability to create jobs & contribute to economic growth in the present fragile economic environment. An American Express survey of middle market chief financial officers had 2-3rds of them believing the US economy would stay flat, act erratically or decline further on 2003.