Notes to the Financial Statements
8.5 Discontinued operations The Board had previously initiated a strategic review in the Wealth Management segment to seek out and pursue opportunities to reset and simplify the business with the ambition of retaining its core focus on being a life risk insurance provider. The Board continues to be committed to the exit of the Wealth Management business with significant progress made in the year. Sale of investment management business ClearView entered into a share sale agreement (on 22 February 2023) for the sale of ClearView Financial Management Limited ( CFML ) to Human Financial Pty Limited ( Human Financial ), subject to the completion of certain conditions precedent. The original sale agreement proceeds included a cash component of $1.3 million and a 40% equity stake in Human Financial. In November 2023 and subsequently in January 2024, ClearView signed revised sale agreements with Human Financial. Under the terms of the revised sale agreements, the proceeds included a cash component of $5 million, with no allowance for an equity interest in Human Financial. Prior to completion of the sale, in January 2024, ClearView received a pre-completion dividend of $0.75 million from CFML that did not result in CFML’s net tangible assets being less than $5 million. Completion of the sale occurred on 31 January 2024, with a deferred consideration of $4.85 million (net of $0.15 million completion payment) received on 28 February 2024. Exit of superannuation business The superannuation fund trustee, ClearView Life Nominees Pty Limited ( CLN ) has, at the same time, been considering a number of options and the best way forward for the superannuation fund, ClearView Retirement Plan ( CRP ). CLN entered into a deed of retirement and appointment ( DORA ) with Equity Trustees Superannuation Limited ( ETSL ) that effectively changed the trustee of the CRP to ETSL
with effect from 14 December 2023. ETSL is as at the date of this report undertaking a process to determine the most appropriate pathway for the CRP. The outcome of these considerations informs the roadmap and timing for the exit of the superannuation business and the related unwind of the life investment contracts attached to the CRP. Subsequent to its retirement as the trustee for the CRP, CLN is no longer an operating entity and has released the capital previously held in the trustee for operational risk ( Operating Risk Financial Requirement - ORFR ). Aligned to the transition of trustee, ClearView Wealth Limited ( CWL ) has entered into arrangements with Equity Trustees Limited ( EQT ) to provide funding reflective of the ORFR to EQT for an amount of $3.5 million, until the successor fund transfer ( SFT ) of the CRP is completed. This is expected to be repaid on completion of the SFT in due course (subject to there being no operational risk event under the terms of the agreement). On 22 April 2024, ClearView received a draw notice from EQT that requested a loan of $3.25 million to be drawn on 1 May 2024 with the interest period being 3 months. ClearView transferred the requested loan amount to EQT on 1 May 2024. The loan is included in the receivable (see section 3.1) and the ECL for the loan is considered immaterial as the risk of default is low. Post exit of the Wealth Management business, ClearView will be a simplified and less complex business with a focus on life insurance. However, given the trustee considerations, the timing of full exit of the Wealth Management business remains uncertain but is expected to be by Q3 FY25. In accordance with AASB 5 Non-Current Assets Held for Sale and Discontinued Operations, the Wealth Management segment (excluding CFML which was sold in January 2024) continues to meet the criteria to be classified as held for sale in the consolidated financial statements for the period ended 30 June 2024.
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ClearView Annual Report 2024
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