S&P Places SGIO on S&P WatchDeveloping.

MELBOURNE--(BUSINESS WIRE)--Sept. 11, 1998--Standard & Poor's CreditWire 9/11/98--Standard & Poor's today placed its single-'A'-minus insurer financial strength and counterparty credit ratings of SGIO Insurance Ltd. (SGIO) on CreditWatch with developing implications.

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The CreditWatch action follows uncertainties on the future ownership of SGIO, now that a takeover bid is in the market. Should Wesfarmers Ltd. be successful in acquiring SGIO, some uncertainty also surrounds the financial structure of SGIO within the Wesfarmers group. The single-'A'-minus ratings on SGIO will likely be affirmed if capital and reinsurance support was structured at an appropriate level and the financial impact of the Wesfarmers group ownership was assessed as either neutral or positive by Standard & Poor's.

Wesfarmers Ltd. is a Western Australian-based conglomerate, which has existing insurance operations through Wesfarmers Federation Insurance Ltd., predominantly a rural insurer with net premium income of about A$120 million for the year ended June 30, 1997. SGIO is a larger insurance company, with a strong market position in personal and commercial lines in Western Australia and South Australia, and net premium income of A$297 million for the year ended June 30, 1998, Standard & Poor's said.---CreditWire, Copyright 1998, Standard & Poor's Rating Services

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