AMP plans a split future

Shares in the troubled Australian insurance giant AMP have collapsed by 36% after the company sold shares on Friday at a heavy discount.

Shares in AMP were suspended last Wednesday ahead of the announcement of the sale of its UK operations, which included a writedown of A$2.6bn (�1bn; $1.6bn).

Friday's A$1.2bn share issue to institutional investors was at A$5.50, well below their closing price of A$8.73, with the proceeds marked to fund the demerger.

In trade on the Australian Stock Exchange, A$3.8bn was wiped off the value of the company as shares slumped to A$5.57 shortly after trade resumed on Monday.

The share issue amounted to about 30% of AMP's stock and significantly diluted the value of the company's existing shares.

British patient

AMP's expansion into the UK financial services industry caused the company serious difficulties, which had already sent its share price to record lows.

Billions of dollars had to be pumped into the UK units to keep their reserves above the minimum capital requirement of the British industry regulator.

The UK operations, including Pearl, are due to be demerged from the profitable Australian and New Zealand operations.

AMP shareholders will vote on the plan later this year.

If approved, two companies will be listed on the Australian Stock Exchange, with the Australian and New Zealand operations retaining the AMP name while the British units will be called Henderson.