Troubled wealth manager AMP has unveiled plans to raise A$650m ($440m) capital in a bid to drive growth.
The capital raising will be executed through underwritten placement to institutional investors and additional share purchase for retail investors.
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Proceeds from the capital raise will be used to support growth in core operations.
The firm also intends to reinvent its Australia wealth management business as part of a three-year A$1.3bn transformation programme.
Plans are on to overhaul aligned advice, further integrate AMP Bank solutions with wealth management, as well as prioritise direct-to-client channels and digital tools.
The firm also seeks to revamp AMP Capital by focusing on real assets and public markets and looking out for international growth opportunities.
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By GlobalDataAMP expects the cost-saving initiatives to offer A$300m in savings by FY 22.
Meanwhile, AMP revised the terms for the divestiture of its life insurance business to Resolution Life.
The deal recently faced regulatory hurdles in New Zealand. Currently valued at A$3bn, the transaction is now anticipated to close in the first half of next year.
Moreover, the investment manager said that it will not declare a first half 2019 dividend.
AMP CEO Francesco De Ferrari said: “The capital raising and the AMP Life sale will provide the funds to implement immediately our new transformational strategy, which creates a simpler, higher-growth and higher-return AMP that’s focused on clients and ensures that our balance sheet will be unquestionably strong.
“We are reinventing our Australian business to deliver a proposition that fulfils client needs with whole-of-wealth solutions including banking.
“We will continue to grow AMP Capital through differentiated capabilities and international growth opportunities.”
The initiatives come as AMP reported a loss attributable to shareholders of A$2.29bn for the half-year ended 30 June 2019, versus a profit of A$115m a year ago.
Underlying profit dropped to A$309m from A$495m.
AMP’s assets under management and administration at the end of June 2019 were A$275bn, compared to A$258bn at the end of December 2018.
