October 25 2014 Latest news:
Ben Woods, Business writer
Wednesday, July 2, 2014
Protestors criticising the flotation of the AA motoring group have held a demonstration outside Aviva’s headquarters in Norwich.
Members of the GMB Union claim that AA staff have now been saddled with a heavy debt burden after its private equity owners Permira, Charterhouse and CVC sold their entire stake in the business during its London Stock Market debut last month.
The protest targeted Aviva’s Surrey Street offices today after it emerged that the insurer’s asset management arm – Aviva Investors – was one of a number of companies that bought substantial shares in the AA.
The GMB Union claims that each AA patrol now carries £1.3m in debts and interest of £53,000 per year as a result of the stock market float on June 23.
But Aviva Investors said there was now a clear focus to reduce the debt burden of the roadside recovery business. Meanwhile, the recognised union for AA workers – the Independent Democratic Union – has backed the flotation.
Paul Maloney, GMB Regional Secretary, said: “GMB is targeting Aviva which is participating in the plan by the owners to float AA and dump massive debts onto the AA.
“Most of the £4bn debt on the AA balance sheet arises from asset stripping. It is securitised against annual fees paid by AA’s motorist members for breakdown cover.”
The protest, which was carried out peacefully, featured 11 people in AA high visibility jackets carrying mock globes on their backs to represent the weight of the world.
It is understood that institutional investors in the AA now include Aviva, Blackrock, Legal & General, Invesco, and Lansdowne Partners.
An Aviva Investors spokesperson said: “The debt at the AA is an inescapable fact but one of the aims of the newly quoted AA is to focus on reducing both the amount of debt and the interest rate paid thereon so that should be welcome news for the GMB members in the longer term.”
Alistair Maclean, national secretary of the IDU trade union, said the flotation was “great news for the AA, which as one of Britain’s most trusted companies now has a stable and bright future.”
Previous protests have been held by the GMB Union outside the headquarters of the AA’s previous private equity owners.
A £2m plan to transform Palmers department store in Dereham and a neighbouring eyesore into an upmarket supermarket and clothing shop has been confirmed.