Aviva announces £600m share buyback
Aviva has announced that it will buy back £600m of shares, a fifth more than it promised at its full year results in March.
The company had promised to return £500m to shareholders, but courted controversy by saying that some of that money could be used to cancel preference shares. That part of the plan was ditched after an outcry from investors, and Aviva yesterday promised to pay £14m to people who had lost out by selling the preference shares in the wake of the announcement.
The buyback of ordinary shares unveiled on Tuesday is part of a plan to deploy £2bn of excess capital this year. Almost half of that will be used for debt reduction, while £600m has been earmarked for bolt on acquisitions.
The shares will be bought in the market by the end of the year and cancelled.
Mark Wilson, Aviva chief executive, said: “Aviva has significant surplus cash and capital and we are deploying £2bn productively in 2018. The £600m buy-back, together with our plan to repay £900m of expensive debt maturing this year and invest in bolt-on acquisitions, will grow Aviva's earnings, strengthen cashflow and improve debt ratios."