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AMP Limited (ASX:AMP) share price is now trading at a 15-year low

Shareholders of our largest listed wealth management group should be getting used to holding the wooden spoon although I suspect it still hurts to see the AMP Limited (ASX: AMP) share price slump to a new 15-year low today.

Shares in AMP are down 18% to $2.70 at the time of writing – making the stock the worst performer on the S&P/ASX 200 (Index:^AXJO) (ASX: XJO) index today.

The plunge in the stock comes as global markets faced a meltdown although the stock was already on a back foot from the Hayne Royal Commission, which also sparked a painful de-rating in the share prices of the big banks Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ).

The weakness in the AMP share price today comes even as management announced that its balance sheet will be padded with an additional $3.3 billion in cash and equity from the sale of AMP Life.

AMP will also enjoy a $150 million capital release after signing a binding agreement with Swiss Re to reinsure its New Zealand retail wealth protection.

Furthermore, the group is planning to spin-off its New Zealand wealth management business through an initial public offer (IPO) in 2019.

Such spin-offs would usually excite the market with Wesfarmers Ltd (ASX: WES) and BHP Billiton Limited (ASX: BHP) enjoying an uplift on news that they were divesting Coles and South32 Ltd (ASX: S32) respectively.

But AMP couldn’t have chosen a worse day to make this announcement. No one is in the mood to listen to good news when every sector of the market is wallowing in a sea of red.

The divestments make strategic sense for the embattled group as it needs to shore up its capital base and simplify its business in the face of allegations of bad corporate behaviour.

It is clear that AMP can’t survive in its current form and a radical restructure is needed to win back the confidence of the market.

Foolish Takeaway

Even with today’s announcement, I doubt investors will be piling back into the stock anytime soon as there is a lack of positive catalysts for the AMP share price in the foreseeable future.

More water needs to pass under that bridge before I can be tempted to dip my toe into what is potentially a very cheap stock.

This is also assuming I will get the opportunity as a slimmed down AMP could very well attract takeover interest.

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Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, BHP Billiton Limited, National Australia Bank Limited, South32 Ltd, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.