LONDON (Reuters) - British insurer Aviva (AV.L) said on Tuesday it had launched a 600 million pound ($825.12 million) share buyback program, as part of a bigger 2 billion pound capital deployment plan aimed at slashing debt and boosting share earnings.
Citigroup (C.N) will conduct the share buy-back program on Aviva’s behalf. The program, which has been approved by regulators, will start on May 1 and will end no later than December 31, 2018.
“Aviva has significant surplus cash and capital and we are deploying 2 billion pounds productively in 2018. The 600 million pounds buy-back, together with our plan to repay 900 million pounds of expensive debt maturing this year and invest in bolt-on acquisitions, will grow Aviva’s earnings, strengthen cashflow and improve debt ratios,” Chief Executive Mark Wilson said.
The dividend yield on Aviva shares currently stands at 5.2 percent, and with the dividend expected to grow further, Aviva said its board believed a buy-back plan was a “compelling” use of Aviva’s excess capital.
($1 = 0.7272 pounds)
Reporting By Sinead Cruise, editing by Lawrence White