Promina finalises mortgage insurance arm sale
Promina Group has completed the sale of Vero Lenders Mortgage Insurance (VLMI) to Genworth Financial Mortgage Insurance for consideration of $220 million.
The insurance group had made the decision not to write any new business to VLMI in April 2004, and run the company off its existing clients.
In line with this earlier decision, the business has been sold to Genworth, a company Promina feels has a better ability to manage VLMI because of its presence in the market and scale.
Promina was waiting for final regulatory approval from the Australian Competition and Consumer Commission (ACCC) before completing the transaction with Genworth. The ACCC issued its approval on June 16.
The purchase price of $220 million represents a $25 million premium received for the business, based on the current book value of VLMI.
Promina will now report the sale in its results for the half year ending December 31, 2006.
A spokesperson for the company said the timing of the accounting treatment was consistent with the professional advice Promina had sought regarding the completion of the sale..
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