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Tower: The proposals in a nutshell

Monday, December 7th 1998, 12:00AM

by Philip Macalister

Tower Corporation’s proposal

GPG’s latest plan

If it obtains preliminary approval in the High Court this week, Tower will need 75 per cent member approval to convert from a member-based organisation to a public listed company.

Merge Tower into GPG’s 53 per cent owned financial subsidiary Tyndall Australia to create Tower-Tyndall New Zealand Ltd.

Tower will issue shares to its 476,000 members in New Zealand and Australia in return for their membership rights.

Offer Tower members a total of $328 million in stock in return for their membership rights.

The proposal involves a $260 million equity raising, with Tower members who had policies with the old Government Life getting 70 per cent of the economic value of the new company.

The new company would distribute all of the $228 million it says Tower has in reserves to the organisation’s ‘parent members’ (who had policies with the old Government Life) at $2.50 a share.

About 56 per cent of the economic value will go to participating policyholders and 14 per cent to non-participating policyholders. The remaining 30 per cent will go to policyholders in Tower subsidiaries.

Added to that, non-participating policyholders and policyholders in Tower subsidiary companies (a total of around 359,000 policyholders) will be issued $100 million in $2.50 shares.


As a result, GPG’s holding will drop to around 34 per cent in the new company. Tower’s members will hold some 32 per cent.

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