IOOF takes first step to demutualise
IOOFhas indicated that it would tackle the issue of demutualisation, if its members should vote in favour of the proposal in April or May next year.
The IOOF Board announced today that it will be recommending to vote in favour of the demutualisation next year which will release more than $100 million to be divided up amongst its 95,000 members. As of last night, IOOF has closed its doors to new membership.
The move to demutualise was first flagged by Money Management in September and IOOF group managing director Robert Turner says there were two main reasons behind the move to demutualise.
First, the group had grown rapidly in recent years with a double in sales in the last year.
“It would’ve grown even faster if it had access to capital, which we see as very important,” Turner says.
The second reason he gives is that while the wealth of the group had continued to grow, the membership had begun to diminish, due to insurance bonds being closed off and members dying.
“Now is the time to share the wealth with the diminishing number of members,” Turner says.
IOOF chairman Lindsay Bytheway says the board is in the best interests of IOOF and its members.
“It is the intention of the board to develop a demutualisation proposal to the stage where it can be submitted to members for their approval at a general meeting prior to June 30, 2002,” he says.
Turner says this is likely to be in April or May next year.
The demutualisation of IOOF will also enable the group to expand and take advantage of opportunities in the retail arena. According to Turner, this is specifically in acquisitions and alliances which the group would otherwise pass up in its mutual form because of a lack of capital.
Bytheway says IOOF is now entering a new corporate cycle.
“It is paramount that our organisation has the capacity to take advantage of growth opportunities which will increase the value of IOOF for its stakeholders,” he says.
“Following the demutualisation, IOOF will have access to capital which may be required to protect and develop the IOOF position.”
IOOF has more than 95,000 members and investors and employs 280 staff. It has been under operation as a mutual since 1846, and member reserves now exceed $100 million. Funds under management and advice exceeds $4.7 billion.
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