Canadian Underwriter

Employers Re spin-off delayed by GE, says U.S. paper

July 12, 2002   by Canadian Underwriter

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The Wall Street Journal is reporting that an expected spin-off of General Electric’s Employers Re is being put on hold. Citing un-named sources close to the matter, the paper says the expected partial initial public offering is now off the table due to lukewarm response.
A GE spokesperson neither confirmed nor denied the report, says the Wall Street Journal.
GE released its second-quarter financials today, and although the company is reporting a 14% rise in earnings and is on track to meet yearend targets, Employers Re continues to struggle. Losses in the p&c reinsurance unit, along with WorldCom bond exposures, brought overall GE Capital revenues down 4% for the quarter, and dragged earnings down 10%. The quarterly results include approximately $350 million after taxes of adjustments for estimates of prior-year loss events at Employers Re , resulting in a loss of US$236 million for the unit. WorldCom losses are pegged at US$110 million after taxes.
Other business units, including NBC, medical systems, appliances, and eight GE Capital units, all report double-digit earnings growth. Nonetheless, GE shares have fallen 32% in 2002, dropping it from top spot as the world’s most valuable corporation, to fall second behind Microsoft.

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