Delta Lloyd announces ? 1 billion underwritten rights issue
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Delta Lloyd today announces its intention to launch a rights issue to raise up
to ? 1 billion of additional equity capital. The rights issue is part of a
broader plan of management actions and capital measures to ensure Delta Lloyd's
solvency position is strengthened as the company transitions into the new
Solvency II regime, effective from 1 January 2016. Delta Lloyd has made strong
progress with management actions to enhance its capital and will execute further
measures to do so. These capital measures, together with Delta Lloyd's track
record in commercial and operational performance, will unlock Solvency II net
capital generation. The rights issue is underwritten by a syndicate of banks for
the full ? 1 billion, subject to customary conditions. The rights issue is
expected to launch shortly after the publication of the 2015 full year results
on 24 February 2016, subject to obtaining shareholder approval at an
Extraordinary General Meeting (EGM) which is to be held prior to launch.
Capital measures to support strategy under Solvency II
* Management decision to focus on Solvency II standard formula (SF); Q3 2015
SF ratio of 136%[1]
* Near term management actions estimated to deliver increase in solvency of
approx. 10-15%-points
* Intention to raise up to ? 1 billion of new equity capital via a rights
issue, to reach an expected near term SF ratio of approx. 175-180% including
the impact of management actions, at top end of target range of 140-180%
Moving to full cash dividend
* Supported by Solvency II net capital generation from the businesses
* Targeted ? 130 million full cash dividend
* Final 2015 dividend suspended
Hans van der Noordaa, chairman of the Executive Board: "Delta Lloyd has built a
strong business, with excellent multi-channel distribution capabilities and a
track record in cost management. We are fully committed to delivering results,
based on customer focused, profitable, capital generating new business. Our
results show robust progress towards our goals. But, to support our strategy
under Solvency II, and following months of analysis, we are today presenting a
broad solvency enhancement plan, consisting of management actions and a rights
issue. We realise this is a very substantial capital raise. But after executing
this plan, Delta Lloyd will be appropriately capitalised and well positioned for
the new regulatory regime. We believe these measures will then allow us to
create value for our stakeholders going forward, while allowing shareholders to
benefit from the long term potential of our strong franchise."
Solvency II: standard formula
In the first half of 2015, we observed volatility in our solvency ratio, which
was caused predominantly by model adjustments, due to remaining uncertainties in
our internal model. To address this volatility, management decided to order a
full review of the internal model. The preliminary findings suggested room for
improvement, and so we have taken the decision to use the more prescriptive
standard formula for our capital requirements. The SF ratio was 136%(1) at end
of Q3 2015, reflecting Delta Lloyd's current interpretation of Solvency II
regulation. Over the next year, the internal model will be reviewed once again,
at which point we may decide whether it is helpful for Delta Lloyd to implement
the internal model for Solvency II purposes.
Management actions delivering results
The rights issue is part of a broader plan of management actions and capital
measures to ensure Delta Lloyd's solvency position is strengthened as the
company transitions into the new Solvency II regime, effective from 1 January
2016. Delta Lloyd's solvency enhancement plan includes a number of measures
which management has pursued and will continue to implement.
Completed[2]:
* Two longevity hedge transactions in 2014 and 2015;
* Equity offering of 19.9 million new ordinary shares via an accelerated
bookbuild (? 337 million);
* Disposal of our non-core activities Delta Lloyd Bank Belgium and Delta Lloyd
Life Deutschland; and
* Restructuring the ? 404 million subordinated loan from Fonds NutsOhra to
ensure Solvency II grandfathering for a period of three years.
Near-term[3]:
* Executing reductions in Delta Lloyd's commercial real estate exposures;
office portfolio sale announced, sale of retail portfolio progressing; and
* Options for Delta Lloyd's 30% stake in Van Lanschot under review; a
reduction in this position will have a positive impact.
Ongoing:
* Accelerating shift towards capital light products;
* Further optimisation of Solvency II balance sheet and investment portfolio;
and
* Strong focus on new business profitability and cost discipline.
Delta Lloyd will provide an update on the progress on these strategic
alternatives at its Investor Day, which is to be held in May 2016.
Proposed transaction
The rights issue will be effected by granting transferable subscription rights
to shareholders of Delta Lloyd. Subject to applicable securities laws, such
rights will entitle Delta Lloyd shareholders to subscribe for ordinary shares.
Delta Lloyd has entered into a standby underwriting agreement with Goldman Sachs
International acting as Sole Global Coordinator and Joint Book Runner, as well
as Merrill Lynch International and Barclays Bank PLC, acting as Joint Book
Runners for the full ? 1 billion, subject to customary conditions. The proposed
transaction will be submitted for approval to our shareholders at an EGM which
will be called prior to the launch of the rights issue. It is expected that the
rights issue will be launched shortly after the publication of the 2015 full
year results on 24 February 2016 and will include public offers in the
Netherlands and Belgium only.
Delta Lloyd's SF ratio is expected to increase to approximately 175-180% in the
near term, including the impact of management actions and the rights issue.
Moving to full cash dividend in 2016
Delta Lloyd will introduce an updated dividend policy in 2016, which is expected
to provide stable dividends for our shareholders, as it is supported by the
underlying targeted Solvency II net capital generation of ? 200-250 million per
year[4]. We target ? 130 million dividend for 2016, subject to internal Solvency
II thresholds, with the interim dividend 2016 payable in 2016 and final dividend
2016 payable in 2017. The dividend may be paid entirely in cash or entirely in
shares, as the shareholder prefers. However, Delta Lloyd will neutralise the
dilutive effect of any future stock dividend on earnings per ordinary share,
through the repurchase of ordinary shares. The final 2015 dividend is suspended.
Unlocking underlying net capital generation
After the completion of the above actions, Delta Lloyd will have a robust
solvency position and supported by our strong commercial and operational
performance we will be able to unlock the underlying net capital generation. We
have an ongoing commitment to improve cost efficiencies. Going forward, we will
focus on capital release and cash generation, aligning capital and strategy. We
will continue to optimise our balance sheet to reduce volatility and to improve
risk-adjusted returns. Our leading position with intermediaries and good
customer satisfaction scores will drive commercial opportunities, both in Life
insurance and General insurance. We will continue to shift from defined benefit
to a less capital intensive defined contribution business, focus on (DB) back-
books to optimise capital, and maintain a strong focus on profitability of our
new business.
Conference call on 30 November 2015
On Monday 30 November 2015 at 10.30 am (CET) Delta Lloyd will host a conference
call for analysts, which can also be followed via audiocast on our website.
Conference call: 30 November 2015, 10.30 am (CET)
+31 20 717 68 68 (English language)
Participant code: 14708136#
This press release is also available at www.deltalloyd.com.
* This press release contains regulated information (gereglementeerde
informatie) within the meaning of the Dutch Financial Supervision Act (Wet
op het financieel toezicht) which must be made publicly available pursuant
to Dutch law.
* Certain statements contained in this press release that are not historical
facts are "forward-looking statements". Forward-looking statements are
typically identified by the use of forward looking terminology such as
"believes", "expects", "may", "will", "could", "should", "intends",
"estimates", "plans", "assumes", "anticipates", "annualised", "goal",
"target" or "aim" or the negative thereof or other variations thereof or
comparable terminology, or by discussions of strategy that involve risk and
uncertainties. The forward-looking statements in this press release are
based on management's beliefs and projections and on information currently
available to them. These forward-looking statements are subject to a number
of risks and uncertainties, many of which are beyond Delta Lloyd's control
and all of which are based on management's current beliefs and expectations
about future events.
* Forward-looking statements involve inherent risks and uncertainties and
speak only as of the date they are made. Delta Lloyd undertakes no duty to
and will not update any of the forward-looking statements in light of new
information or future events, except to the extent required by applicable
law. A number of important factors could cause actual results or outcomes to
differ materially from those expressed in any forward-looking statement as a
result of risks and uncertainties facing Delta Lloyd and its subsidiaries.
Such risks, uncertainties and other important factors include, among others:
(i) changes in the financial markets and general economic conditions, (ii)
changes in competition from local, national and international companies, new
entrants in the market and self-insurance and changes to the competitive
landscape in which Delta Lloyd operates, (iii) the adoption of new, or
changes to existing, laws and regulations including Solvency II, (iv)
catastrophes and terrorist-related events, (v) default by third parties
owing money, securities or other assets on their financial obligations, (vi)
equity market losses, (vii) long- and/or short-term interest rate
volatility, (viii) illiquidity of certain investment assets, (ix) flaws in
underwriting assumptions, pricing and/or claims reserves, (x) the
termination of or changes to relationships with principal intermediaries or
partnerships, (xi) the unavailability and unaffordability of reinsurance,
(xii) flaws in Delta Lloyd's underwriting, operating controls or IT systems,
or a failure to prevent fraud, (xiii) a downgrade (or potential downgrade)
of Delta Lloyd's credit ratings, and (xiv) the outcome of pending,
threatened or future litigation or investigations, or other factors referred
to in this press release.
* Should one or more of these risks or uncertainties materialise, or should
any underlying assumptions prove to be incorrect, Delta Lloyd's actual
financial condition or results of operations could differ materially from
those described herein as anticipated, believed, estimated or expected.
* Please see the Annual Report for the year-ended 31 December 2014 for a
description of certain important factors, risks and uncertainties that may
affect Delta Lloyd's businesses.
Disclaimer
The information contained herein is not for release, publication or
distribution, directly or indirectly, in or into the United States, Canada,
Australia or Japan or any other jurisdiction in which the distribution or
release would be unlawful.
This announcement does not constitute or form part of any offer or invitation to
sell, or any solicitation of any offer to purchase. It is a press release and
not a prospectus for the purposes of the Prospectus Directive. Any purchase of
securities of Delta Lloyd N.V. (the "Company") pursuant to the proposed offering
should only be made on the basis of information that will be contained in the
formal prospectus to be issued in due course in connection with the proposed
offering (the "Prospectus"), to be approved by the Netherlands Authority for the
Financial Markets (Autoriteit Financiële Markten), and any supplement or
amendment thereto. The Prospectus will contain detailed information about the
Company and its management, as well as financial statements and other financial
data. When made generally available, copies of the Prospectus may be obtained at
no cost through the Company's website (www.deltalloyd.com). It may be unlawful
to distribute the Prospectus in certain jurisdictions.
These written materials do not constitute an offer to sell, or a solicitation of
offers to purchase or subscribe for, securities in the United States or any
other jurisdiction. The securities referred to herein have not been, and will
not be, registered under the Securities Act of 1933, as amended, and may not be
offered, exercised or sold in the United States absent registration or an
applicable exemption from registration requirements. There is no intention to
register any portion of the offering in the United States or to conduct a public
offering of securities in the United States.
This announcement should not be distributed, published or reproduced in whole or
in part or disclosed by recipients and any such action may be restricted by law
in certain jurisdictions. Persons receiving this announcement should inform
themselves about and observe any such restriction: failure to comply may violate
securities laws of any such jurisdiction.
The issue, exercise or sale of securities in the offering are subject to
specific legal or regulatory restrictions in certain jurisdictions. The Company
and the Banks (as defined below) assumes no responsibility in the event there is
a violation by any person of such restrictions.
The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the securities
referred to herein, in any jurisdiction in which such offer, solicitation or
sale would be unlawful. Investors must neither accept any offer for, nor
acquire, any securities to which this document refers, unless they do so on the
basis of the information contained in the Prospectus.
The Company has not authorized any offer to the public of securities in any
Member State of the European Economic Area other than the Netherlands and
Belgium. With respect to each Member State of the European Economic Area other
than the Netherlands and Belgium and which has implemented the Prospectus
Directive (each, a "Relevant Member State"), no action has been undertaken or
will be undertaken to make an offer to the public of securities requiring
publication of a prospectus in any Relevant Member State. As a result, the
securities may only be offered in Relevant Member States (a) to any legal entity
which is a qualified investor as defined in Article 2(1)(e) of the Prospectus
Directive; or (b) in any other circumstances which do not require the
publication by the Company of a prospectus pursuant to Article 3 of the
Prospectus Directive. For the purposes of this paragraph, the expression an
"offer of securities to the public" means the communication in any form and by
any means of sufficient information on the terms of the offer and the securities
to be offered so as to enable an investor to decide to exercise, purchase or
subscribe the securities, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State and the
expression "Prospectus Directive" means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in
the Relevant Member State), and includes any relevant implementing measure in
the Relevant Member State and the expression "2010 PD Amending Directive" means
Directive 2010/73/EU.
This communication is directed only at (i) persons who are outside the United
Kingdom or (ii) in the United Kingdom, persons who have professional experience
in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the
"Order"), or who are high net worth entities, and other persons to whom it may
lawfully be communicated, including those falling within Article 49(2) of the
Order (all such persons together being referred to as "relevant persons"). Any
investment or investment activity to which this communication relates will only
be available to and will only be engaged in with, relevant persons. Any person
who is not a relevant person must not act or rely on this document or any of its
contents.
All investment is subject to risk. The value of the securities offered may go
down as well as up. Past performance is no guarantee of future returns.
Potential investors are advised to seek expert financial advice before making
any investment decision.
The contents of this announcement have not been verified by Barclays Bank PLC,
Goldman Sachs International, Merrill Lynch International or any of their
respective affiliates (together, the "Banks").
The Banks, each of which are authorised in the United Kingdom by the Prudential
Regulation Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, are each acting
exclusively for the Company and for no-one else in connection with any
transaction mentioned in this announcement and will not regard any other person
(whether or not a recipient of this announcement) as a client in relation to any
such transaction and will not be responsible to any other person for providing
the protections afforded to their respective clients, or for advising any such
person on the contents of this announcement or in connection with any
transaction referred to in this announcement.
No reliance may be placed for any purposes whatsoever on the information
contained in this announcement or on its completeness. No representation or
warranty, express or implied, is given by or on behalf of the Company or the
Banks or their subsidiary undertakings, affiliates, respective agents or
advisers or any of such persons' affiliates, directors, officers or employees or
any other person as so to the fairness, accuracy, completeness or verification
of the information or the opinions contained in this announcement and no
liability is accepted for any such information or opinions. Each of the Banks
accordingly disclaims all and any responsibility and liability whatsoever,
whether arising in tort, contract or otherwise, for any errors, omissions or
inaccuracies in such information or opinions or for any loss, cost or damage
suffered or incurred howsoever arising, directly or indirectly, from any use of
this announcement or its contents or otherwise in connection with this
announcement. Persons receiving this document will make all trading and
investment decisions in reliance on their own judgement and not in reliance on
the Banks. None of the Banks is providing any such persons with advice on the
suitability of the matters set out in this announcement or otherwise providing
them with any investment advice or personal recommendations. Any information
communicated or otherwise made available in this announcement is incidental to
the provision of services by the Banks to the Company and is not based on
individual circumstances.
--------------------------------------------------------------------------------
[1] Reflecting Delta Lloyd's current interpretation of Solvency II regulation.
Includes certain actions completed or to be completed in Q4. These include: Sale
of Delta Lloyd Deutschland and private equity, merger of properties within Delta
Lloyd Leven, restructuring of FNO subordinated debt, impact of the September
2015 curve prescribed by EIOPA in October 2015 and transitional measures for
equity type 1 and type 2
[2] These completed measures are included in the SF ratio of 136%
[3] These near term measures are estimated to deliver approximately 10-15%-
points increase
[4] Consistent with 2015YTD capital generation
Full press release:
http://hugin.info/142905/R/1969996/720144.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Delta Lloyd via GlobeNewswire
[HUG#1969996]
Unternehmensinformation / Kurzprofil:
Datum: 30.11.2015 - 07:30 Uhr
Sprache: Deutsch
News-ID 436224
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