Tower capital restructure confirms solvency
TOWER Limited has concluded a $30 million capital restructure to exceed solvency requirements forTower Australiaimposed by theAustralian Prudential and Regulatory Authority(APRA).
Tower says it exceeds the APRA target based on its latest financial estimates for the Tower Australia operation, which suffered losses last year resulting in its capital position falling below $29 million.
The restructure involved the use of internal Tower Group funds with those from Tower Insurance’s Australian operations moved to Tower Australia.
The Tower Insurance funds were then replaced by funds from Tower New Zealand and the Tower Group removed the one-third portion of Tower Trust Australia held in the statutory funds of Tower Australia and replaced it with cash.
Tower says this is a more appropriate holding of the funds and is in line with APRA’s preference that strategic assets not be held in statutory funds.
Tower Australia chief executive Jim Minto says despite the moves the group was always in excess of regulatory solvency levels, even after the group suffered a substantial loss last year and the transaction lifts the group above its own targets.
“Tower Australia recorded a profit for the three months to December 31, 2002. We have implemented major change programs including cost reductions and redundancies,” Minto says.
“In March we launched a new set of risk products in the market and have also developed and launched a new superannuation master trust. We are pleased with our progress to date.”
AUTHOR
Jason Spits
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