Insurer Aviva backs down on preference share cancellation plans
PUBLISHED: 09:01 23 March 2018 | UPDATED: 09:01 23 March 2018
Insurance giant Aviva has backed down on plans to cancel £450m of preference shares after criticism from the financial industry.
The EDP/EADT Top 100 company, which employs more than 5,000 people at its Surrey Street offices in Norwich, had proposed to scrap the shares to make savings of £38m a year in interest.
Unlike ordinary shares, preference shares provide no voting rights but often come with a high rate of interest and are popular with savers and pensioners.
In an era of low interest rates cancelling the shares can seem a prudent move however investment groups reacted with anger when Aviva raised the idea two weeks ago.
Mark Wilson, group chief executive, said: “The reputation of Aviva, and the trust people have in us, is paramount.
“Our announcement today means that preference shareholders can rest secure in their holdings.”
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