March 23, 2018 / 2:05 PM / a year ago

Funds ask Aviva to make clear preference shares are irredeemable

FILE PHOTO: Pedestrians walk past an Aviva logo outside the company's head office in the city of London, Britain, March 5, 2009. REUTERS/Stephen Hird/File Photo/File Photo

LONDON (Reuters) - Six large institutional investors said on Friday that Aviva’s decision to drop plans to cancel its preference shares addressed most of their concerns, but added issuers of preference shares should make it clear they are irredeemable.

British insurer Aviva on Friday abandoned its plan to cancel the high-shares after opposition from investors and scrutiny from the country’s financial watchdog.

Aviva’s change of heart “goes a long way toward addressing our concerns,” M&G Prudential, Invesco, GAM, Edentree, BlackRock and Legal & General said in a statement.

“We would encourage Aviva, and other companies with similar instruments, to take whatever steps necessary to modernise their articles of association in a way that would reflect both the group’s intentions going forward, and the true irredeemable nature of the instruments.”

Reporting by Carolyn Cohn, editing by Maiya Keidan

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