Public SGIO float fully underwritten

7/2/94

The public float of SGIO Insurance Limited has been fully underwritten at a value of $165 million, Premier and Treasurer Richard Court announced today.

Mr Court said the Underwriting Agreement between the underwriters and the SGIO Board had been signed in Perth this afternoon.

Mr Court said the majority of the issue had been set aside for individual investors.

"It is expected the float will give many small investors in Western Australia the chance to buy into the company," he said.

The prospectus for the issue of shares will be lodged with the Australian Securities Commission in Perth tomorrow.  The board of SGIO expect the prospectus to be available for the public later this month and the share issue is expected to open on March 10.

The Underwriting Agreement effectively puts in place the Coalition Government's first privatisation of a Government business enterprise.

Mr Court said the public float of the SGIO was a practical demonstration of the Government's commitment to privatisation.

"The State Government and the SGIO have been preparing for this public float for some time," he said.

"It has involved a restructure of the organisation, the appointment of a new board and managing director and related productivity improvements.

"One consequence of these changes is that the performance of SGIO has improved.

"The board has forecast profit after tax for the 1993-94 year of $17.3 million."

Mr Court said the float of SGIO Insurance Limited would raise $165 million.  Of this amount, $35.6 million would be retained by SGIO to increase its solvency levels.  The balance of the proceeds ($129.4 million) would go to the State Government Insurance Commission.

The Premier said the $165 million would be raised by the issue of 165 million shares at one dollar each.  The issue was now fully underwritten by two Perth based firms, Hartley Poynton Limited and Porter Western Limited, along with JB Were & Son and Bain Capital Markets Limited.