Tower shareholders set for $70m windfall

Tower sold the majority of its life insurance business to Fidelity in May for $145 million in cash and liabilities.

Tower shareholders are in line for a $70 million windfall after the company said it would return capital from the sale of its life insurance business as soon as possible.

The listed insurance company sold the majority of its life insurance business to Fidelity in May for $145 million in cash and liabilities.

But uncertainty around a payout was raised last month when Tower said it would need a minimum solvency margin of $80 million above minimum solvency capital from August 16 to meet the terms of its insurance licence under new prudential supervision laws.

This morning chief executive David Hancock said Tower remained committed to returning a total of $114.5 million to shareholders as and when it was appropriate.

Hancock said now it had confirmed its minimum solvency requirements it was appropriate that some capital be returned to shareholders.

"Tower will confirm the process and timing for the initial return of $70 million of capital to shareholders shortly."

Tower paid out $120 million to its shareholders earlier this year after selling its health insurance and investments businesses.

Tower shares traded up 2c to $1.83 this morning.