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AMP moves to calm demerger fears

AMP has moved to reassure shareholders on the progress of its proposed demerger amid heightened speculation about its future following press reports criticising its asset management arm Henderson Global Investors and a downgrade from rating agency Moody&#39s.

Last week, Moody&#39s downgraded the group&#39s rating based on concern that the demerger of AMP&#39s UK and Australian arms will result in reduced shareholder equity following asset writedowns and capital splitting between the two arms, increasing leverage.

A leaked confidential draft audit document reportedly warns of shortcomings in Henderson&#39s risk controls, exposing it to “significant financial and reputational damage”. Henderson&#39s says it is too premature to comment on the findings as it does not know what the final report will contain.

AMP chief executive And-rew Mohl released a Stock Exchange statement on Monday saying the firm is concerned about “persistent market speculation” about the capital structure of the company post-demerger and its reset preferred securities.

He says it is on target to complete the demerger before the end of the year and that operating margins underlying group earnings and UK writedowns are in line with guidance given in May.

Mohl says: “We are working to inform investors on the status of AMP against this uncertainty and the fact that a number of the complex issues associated with the demerger are yet to be resolved.”

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