Aviva offers preference shareholders £14m goodwill payment to 'restore trust' amid cancellation plans debacle

Amid botched cancellation plans

Insurance giant Aviva has announced it will offer a discretionary goodwill payment of up to £14m to shareholders who sold preference shares from 8 to 22 March, following much criticism over plans to cancel £450m of high-yielding preference shares at par value, which it later scrapped.

Aviva announced its intention to cancel the preference shares on 8 March 2018, following legal advice owing to regulatory requirements, which mean preference shares will no longer count as regulatory capital in 2026. This would have meant shares with fixed dividends of 8%-9% redeemed at an issue price of £1 each despite consistently trading at a significant premium. However, following "strong feedback and criticism", Aviva announced on 23 March it would take no action to cancel preference shares enabling preference shareholders to remain "secure in their holdings". FCA reviews prefere...