Aviva To Offer £14 Mln Goodwill Payment To Certain Preference Shareholders

(RTTNews) - Aviva plc (AV.L, AV) and General Accident plc announced Monday that they will offer a discretionary goodwill payment to shareholders who sold preference shares in the period from March 8 to 22.

Aviva estimates that fewer than 2,000 individual investors sold their preference shares in this period and that the total cost of the goodwill payment scheme should not exceed approximately 14 million pounds.

In its full year results announcement on March 8, Aviva noted its ability to cancel existing preference shares as part of considering its options to return capital to shareholders.

Following feedback, and in light of it, the company on March 23 announced it would take no action to cancel the preference shares.

Aviva said it will offer a discretionary goodwill payment to shareholders who sold preference shares from March 8 to 22 at a share price that was lower than the price that the preference shares returned to following the announcement on March 23.

The company noted that the goodwill payment is intended to put those shareholders in the same financial position they would have been in had they sold their preference shares following the 23 March announcement, rather than the first announcement.

Under current regulation the preference shares will no longer count as regulatory capital in 2026 and Aviva will work towards obtaining regulatory approval for the preference shares, or a suitable substitute, to qualify as capital from 2026 onwards.

"If as we approach 2026 Aviva needs to reconsider this position, it will do so after taking into account the fair market value of the preference shares at that time," the company said.

Aviva said it recognises the uncertainty created for preference shareholders whilst Aviva was considering its options and the impact it had on the wider reputation and trust in the Company.