Shareholders in the NZ-listed WA-based business Insured Group have approved paying creditors with the company’s shares.

At the AGM in Perth last week the shareholders also approved the sale of Classic Cover Insurance and Tasman Insurance Consultants to Rothbury and CEMAC to Austbrokers Holdings.

Insured Group also revealed a 36.6% decline in net profit to $232,000 for the six months ending September 30, compared to an after-tax profit of $366,000 for the corresponding period last year.

Sales in general insurance were $3.6 million in this half year, down from $5.5 million in the same period last year.

Premium funding sales were $186,000 this year, down from $221,000 in the 2009 half while life insurance sales disappeared completely during the six months ending September this year. In the 2009 first half, life insurance sales were $14,000.

On the positive side, the underwriting agency business generated $1.6 million this year, compared to nothing in the 2009 half year.

The company’s borrowings have grown dramatically during the past six months. In March this year borrowings were $5.5 million, but this blew out to $11.7 million at the end of September.

Asset sales such as CEMAC and Classic Cover are expected to reduce this debt considerably, as some liabilities are being transferred with the transactions.

Chairman Bill Jefferies says Insured Group is still looking for a capital-raising during the next six months.

It has recently struck a standby equity subscription agreement with offshore investment group Fortrend Securities, giving it access to an equity-raising facility of up to $5 million.

Mr Jeffries, Anne-Marie Symes, Daniel O’Leary and Santino Di Giacomo were all re-elected as directors.