Forgive and forget

23 March 2018 By Aimee Donnellan Follow @aimeedonnellan

Chief Executive Mark Wilson has been forced to scrap a plan to cancel 450 million pounds of preference shares after a row with institutional and retail investors. He can start winning back their trust by doing more to boost the insurer’s sales and by reducing debt.

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Aviva said on March 23 it would abandon a plan to cancel 450 million pounds of high-yielding preference shares following an investor protest and scrutiny from the UK’s financial watchdog.

The UK insurer said on March 8 it was considering cancelling the preference shares, which pay average coupons of 8.5 percent. It said retiring the shares would save the company 38 million pounds in annual interest

Institutional investors including M&G Prudential, Invesco, GAM, BlackRock, Legal & General and EdenTree called on Aviva Chairman Adrian Montague to scrap the plan to cancel the shares at a meeting on March 20. This investor group owns 30 percent of Aviva’s preference shares and 15 percent of its ordinary stock.

Aviva shares were down 1.6 percent at 4.96 pounds at 1020 GMT on March 23.

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