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Greenstone releases $984 million float prospectus

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Greenstone has lodged a prospectus with the Australian Securities and Investments Commission for an initial public offering and June 16 listing on the Australian Securities Exchange.

Based on an indicative price range of $2-2.50 per share, the direct life and pet insurance company’s float is expected to raise $810-$984 million.

When Greenstone lists, Hollard Investments and the Casey Trust will collectively hold 42-42.6% of outstanding shares. These will enter voluntary escrow agreements until two business days after the release of Greenstone’s 2016 financial-year results.

Hollard Investments, the parent of Hollard Insurance, says it intends to be a long-term shareholder.

Since its formation in 2007 Greenstone has focused on direct insurance products for retail customers, including term life, funeral, income protection, pet and health cover.

However, Greenstone emphasises it has no claims risk or prudential regulatory capital requirements.

All claims risk associated with its insurance products is underwritten by third-party insurers.

CEO Mark Reid says the company is poised for rapid expansion.

“Greenstone has a simple, focused business model and exposure to attractive, high-growth markets. We operate one of the most recognised brands in Australian life insurance, Real Insurance, and have a market-leading position in Australian pet insurance,” he said.

“We operate from one location [in Sydney], with one call centre that is supported by our one call optimisation model.

“This will allow Greenstone to rapidly expand with limited additional fixed costs.”

Greenstone’s insurance products are distributed through the company’s “proprietary brands” (Real, Australian Seniors Insurance Agency, Guardian Insurance and Prime Pet Insurance) and “affinity brands” (Medibank, Woolworths and RSPCA).

It also distributes proprietary and affinity products, plus third-party insurance products, through its Choosi online comparison website.

Prominent company director and former NM Rothschild Australia CEO Rick Lee has been named Greenstone’s independent non-executive chairman. Company co-founder Richard Enthoven will continue to serve as a non-executive director.