LONDON, Nov. 13, 2001 (PRIMEZONE) -- Old Mutual plc (LSE:OML) announces that the Board of Mutual & Federal Insurance Company Ltd. ("Mutual & Federal"), its 51% general insurance subsidiary listed on the JSE Securities Exchange South Africa, has made a declaration to shareholders of a further special dividend payment.
The special dividend of 350 cents per share will have the effect of returning a further R847 million (approximately 60 million pounds based on yesterday's closing mid rate of exchange*) to shareholders. The dividend will be paid on December 10, 2001.
Mutual & Federal has now declared three special dividends in three consecutive years returning R1,444 million, R723 million and now R847 million in capital to shareholders. This reduction forms part of a critical ongoing review of the efficient use of capital. The solvency margin of Mutual and Federal is currently about 80% and will reduce to 60% after the payment of this dividend. The legislated minimum requirement is 25%.
Old Mutual plc has voting control of Mutual & Federal. It owns 51% of Mutual & Federal Investments Ltd., which in turn owns 77% of Mutual & Federal. In addition, Old Mutual owns 12% of Mutual & Federal directly, giving it an aggregate economic interest of 51%. Royal & Sun Alliance Insurance Group owns the remaining 49% of Mutual & Federal Investments Ltd.
* Closing mid rate yesterday R14.12/1 pound