AMP flags $1.2 bn writedown of offshore assets
AMPhas today flagged a possible $1.2 billion writedown of its troubled United Kingdom Financial Services (UKFS) and AMP International businesses.
AMP chief executive Andrew Mohl says a strategic review of the group’s subsidiaries is still under way, but that it was likely to result in writedowns in the order of $1.2 billion for the year ending 31 December 2002.
Mohl says the $1.2 billion figure was likely to include $850 million related to the group’s UK assets, including NPI, which was expected to account for $600 million of the writedown.
A further $350 million is expected to be written down in relation to former AMP International businesses.
“Previous valuations are no longer appropriate in light of the substantial falls in equity markets since 30 June 2002, difficult operating conditions and the changes in the business arising from the five point reform agenda,” Mohl says.
“AMP believes the carrying value of these assets is unlikely to recover for some time and it will therefore be prudent to reflect a more realistic view in the balance sheet.”
The news comes less than a week after AMP announced sweeping changes to its AMP Banking arm.
The changes will see the group pull out of the credit card and property finance markets in Australia and the manufacture of banking products in New Zealand and the UK at a cost of up to 500 jobs.
A further 550 positions are also expected to disappear from AMP’s Australian Financial Services division.
Mohl says a precise value of the writedown of its UKFS and AMP International businesses will not be known for several weeks.
However he says the writedowns in the UKFS division will largely be goodwill and not impact on the net assets of AMP’s UK businesses.
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