Insurer to sell up to 25m shares in Dutch firm
Aviva has stepped up its plans to sell of part of its stake in Dutch insurer Delta Lloyd in a bid to raise £318m.
The UK insurer announced after the close of the market yesterday that it had started its new strategy of disposing of non-core assets with the sale of up to 25m shares in Delta Lloyd worth but increased that to 37m shares worth €10.75 a share due to investor demand.
Panmure Gordon analyst Barrie Cornes wrote in a research note: “This is significant, as it will lower Aviva’s share in Delta Lloyd to below 20% (from 42%) at which point its volatility will have a much lesser impact on Aviva’s IGD surplus. This is a boost to economic capital and evidence that the turnaround strategy at Aviva is underway.”
Aviva now holds 19% of voting rights in the Dutch firm.
It follows bold new restructuring plans unveiled yesterday by Aviva’s chairman John McFarlane, who vowed to turn the company into a “leaner, more agile beast” following a five-period under former chief executive Andrew Moss in which he said it has become too risky and complex.
“We have listened to shareholders and they expressed concerns about our share price, said the business was too complex and that we are too exposed to the eurozone crisis,” McFarlane said. “We will only stay in areas where we can win.”
The company has also reduced its Italian sovereign bond holdings from €6bn to €5bn.
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