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Johannesburg - International financial services group Old Mutual [JSE:OML] said on Wednesday that the sale of its US Life operations to affiliates of Harbinger Capital Partners LLC is only likely to be closed in the first quarter of 2011.
It said that the group and Harbinger are continuing discussions with regulators to get the required approvals for the transaction.
"Old Mutual is assisting Harbinger in exploring possible modifications to the transaction structure from that envisaged in the sale agreement announced on August 6 2010.
"If agreed, it would, inter alia, remove or reduce certain of the residual refinancing obligations of Old Mutual on completion. Any agreed changes to the transaction structure will be communicated to the regulatory authorities and will be subject to their approval," it said.
The firm said it expected the discussions to take some weeks to conclude, and finalisation in the first quarter of 2011.
It added that OM Financial Life Insurance Company (OMFLIC) continues to perform satisfactorily and is expected to pay a dividend of $59m before the year-end.
"We estimate that after this dividend is paid, its RBC ratio will still be in excess of 350%. $522m of the total $551m of the specified securities in the stock purchase agreement have been sold at terms better than those expected on signing of the sale agreement.
"The general account portfolio had a net unrealised gain at November 30 2010 of $501m," the group said.
It said that the group and Harbinger are continuing discussions with regulators to get the required approvals for the transaction.
"Old Mutual is assisting Harbinger in exploring possible modifications to the transaction structure from that envisaged in the sale agreement announced on August 6 2010.
"If agreed, it would, inter alia, remove or reduce certain of the residual refinancing obligations of Old Mutual on completion. Any agreed changes to the transaction structure will be communicated to the regulatory authorities and will be subject to their approval," it said.
The firm said it expected the discussions to take some weeks to conclude, and finalisation in the first quarter of 2011.
It added that OM Financial Life Insurance Company (OMFLIC) continues to perform satisfactorily and is expected to pay a dividend of $59m before the year-end.
"We estimate that after this dividend is paid, its RBC ratio will still be in excess of 350%. $522m of the total $551m of the specified securities in the stock purchase agreement have been sold at terms better than those expected on signing of the sale agreement.
"The general account portfolio had a net unrealised gain at November 30 2010 of $501m," the group said.
