Personal finance: welcome change of status

22nd November 1996 at 00:00
At least 50,000 British teachers look almost certain to get hoped-for windfalls of between #163;285 and #163;5,000 now that Colonial Mutual, the Australian life insurance company has persuaded its policyholders that it should seek a stock market listing.

Last week's vote on whether the company should follow the example set by the Abbey National and other former building societies, which have demutualised, was overwhelmingly in favour of a change of status. Only 37 per cent of Colonial's 538,000 worldwide membership voted, but 97 per cent of them supported demutualisation, far more than the 75 per cent that was needed to change the articles of association.

Colonial, which has operated on a mutual basis for 124 years, will now take its proposals to the Supreme Court in Victoria on December 6.

If it also gives its approval, the company should be listed on the stock market by next April or May. It is expected that it will float on the Australian stock exchange with a market capitalisation of about #163;640 million.

Most of the British teachers who will benefit from the resulting windfall are members of the National Association of Schoolmasters Union of Women Teachers because Colonial is the union's official financial services provider.

It is believed that 60,000 of the company's 270,000 British customers are teachers and the vast majority of them will be entitled to a share allocation based on the number of insurance and pension policies they hold.Only unit trust and personal equity plan customers will receive nothing as a result of the demutualisation. If all goes according to plan, Colonial customers will receive 225 shares worth #163;285 for every qualifying policy.

They will also be allocated 225 share options. Some 90 per cent of Colonial customers will receive more than the minimum allocation, and about half are expected to qualify for shares worth #163;1, 300.

About 7,000 of the British policy-holders will receive shares worth #163;5,000 as the allocation will be partly determined by the size of the policies and the length of time they have been running.

The company has said it will operate a clearing system which will allow policyholders to sell their shares more easily immediately after the changes take effect.

Subscribe to get access to the content on this page.

If you are already a TES/ TESS subscriber please log in with your username or email address to get full access to our back issues, CPD library and membership plus page.

Not a subscriber? Find out more about our subscription offers.
Subscribe now
Existing subscriber?
Enter subscription number


Get Tes online and delivered to your door – for less than the price of a coffee

Save 33% off the cover price with this great subscription offer. Every copy delivered to your door by first-class post, plus full access to Tes online and the Tes app for just £1.90 per week.
Subscribers also enjoy a range of fantastic offers and benefits worth over £270:

  • Discounts off Tes Institute courses
  • Access over 200,000 articles in the Tes online archive
  • Free Tastecard membership worth £79.99
  • Discounts with Zipcar,, Virgin Wines and other partners
Order today