GPG in windfall from sale of AWM stake

Gary Weiss

Guinness Peat Group (GPG) is reporting a profit of about A$172 million ($195 million) from the sale of its 19.4 per cent stake in funds manager Australian Wealth Management (AWM).

The sale was undertaken via an institutional placement at a price of A$2.435 a share, GPG said today.

AWM was spun off from insurance group Tower in early 2005.

GPG described itself as a strategic investment company, and said the sale proceeds were in the form of cash which would be used in GPG's ongoing business.

GPG director Gary Weiss said it had been considered an appropriate time for GPG to divest its shareholding and reinvest the proceeds in investment opportunities where GPG could be more actively involved in enhancing value.

The value of AWM's gross assets at the end of 2006 was A$808 million, and in the six months to December 31 its profits were A$26 million.

GPG shares were up 2c in early trade today on the New Zealand sharemarket to $2.30.

- NZPA