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International long-term savings, protection and investment group Old Mutual plc (OML) intends to return approximately GBP1 billion of net proceeds from the disposal of its Nordic business to shareholders by means of a special dividend, the group said on Friday.

This is equivalent to 18 pence per ordinary share, or its equivalent in other applicable local currencies.

The group also intends to use the remaining GBP1.1 billion of net proceeds, subject to regulatory approvals, to reduce indebtedness.

“Old Mutual's capital flexibility will be enhanced by retaining an increased proportion of the cash flows expected to be generated from operational activity and other corporate actions planned for 2012,” the group said.

As at 31 January 2012, the group had repaid approximately GBP600 million of debt and, based on the use of net proceeds from the disposal, will meet its GBP1.5 billion debt reduction target by the end of 2012, subject to regulatory approvals.

The group expects a total of approximately GBP1.7 billion to be repaid under the group's increased debt repayment plan.

Old Mutual sent out a circular on Friday containing further details of the disposal, the related special dividend and share consolidation, together with a notice convening a General Meeting to be held on 14 March 2012 in London to approve the disposal and te share consolidation.

The group announced in December that it intended to divest its Nordic business, comprising Old Mutual's long-term savings and banking operations in Sweden, Denmark and Norway, to Skandia Liv for net cash consideration of SEK22.4 billion (GBP2.1 billion). - I-Net Bridge