Life insurance and wealth management firm ClearView aims to raise $50 million to repay a CBA debt facility and to support growth.
"The Directors also announce today a fully underwritten pro-rata accelerated renounceable Entitlement Offer to eligible shareholders to raise approximately $50 million, priced at 85c a share," ClearView said in a statement to the ASX yesterday.
ClearView's managing director, Simon Swanson, said the announcement reflects a transition of the company's underlying business from a build phase to a growth phase.
"Notwithstanding that there has been some volatility in investment markets, ClearView is in a strong position with profit growth now emerging," he said.
The firm said it would use $45.5 million to repay the CBA debt facility, and $4.5 million as capital for growth.
ClearView also said that Crescent Capital, which owns together with its associates 53 per cent of ClearView shares, would consider selling its shares in the company.
"The board intends to solicit and evaluate proposals in the best interests of all shareholders. Morgan Stanley has been appointed for this process," the ASX statement said.
As part of the capital raising announcement, ClearView has updated its financial position, following its February half-year results announcement.
It reported that in-force life insurance premiums are up 30 per cent to $142.3 million, with new business written up 8 per cent to $30.1 million for the 10 months ended 30 April 2016.
Within this, the key growth driver, the life advice LifeSolutions portfolio, continues to reflect strong growth, with new business up 20 per cent to $26.4 million for the 10 months ended 30 April 2016. In addition, 62 per cent of LifeSolutions new business to 30 April 2016 was generated from third-party independent financial advisers operating with third-party approved product lists.
Wealth management funds under management are up 8 per cent to $2.04 billion at 30 April 2016, with positive net flows reflecting an improvement in the net outflows of the master trust product, the successful introduction of WealthFoundations and the continued growth of WealthSolutions.
The number of financial advisers operating under ClearView dealer groups is 230, up from 221 at 31 December 2015.
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