Sep
19
LONDON (Alliance News) – Aviva PLC Friday said it is selling its stake in Spanish joint venture CxG Aviva to Novacaixagalicia Banco for EUR287.0 million in cash, following a decision by the Arbitration Tribunal in Madrid which concludes legal proceedings between Aviva and NCG Banco.
In a statement, Aviva said the Tribunal determined a breach by NCG Banco of its shareholder agreement with Aviva following the merger of Caixa Galicia and Caixa Nova into Novacaixagalicia in December 2010, and the bank’s subsequent restructuring in 2011. The decision by the arbitration Tribunal is final, according to Aviva, which said the parties have a one month period to request clarifications on the ruling.
In December 2010, Caixa Galicia consolidated its banking business with Caixa Nova, which resulted in the formation of NCG Banco. The arbitration was initiated by Aviva in October 2012 on the basis that Caixa Galicia had breached the terms of its shareholder agreement with Aviva as a result of its merger.
The FTSE 100-listed insurance and asset management company said the EUR287.0 million represents a multiple of 25 times CxG Aviva’s 2013 operating earnings. It said the cash payment will increase its liquidity by GBP226.0 million and will be used for general corporate purposes.
The deal will increase Aviva’s IFRS net asset value by about 4 pence per share and its economic capital surplus by about GBP200.0 million.
In 2013 CxG Aviva contributed IFRS operating profit of GBP27.0 million to the group.
“This is a good outcome for Aviva which reflects the strong agreements we have in place. We remain focused on maximising returns from our Spanish business in a recovering economy, where we have strong partnerships with leading regional banks, as well as agency and broker distribution,” Aviva Europe Chief Executive David McMillan said in a statement.
“The transaction is expected to complete by the end of 2014 and is subject to regulatory approvals in Spain. Aviva’s joint ventures with Banco Mare Nostrum, Banco CEIIS, Unicaja and Pelayo Seguros, and agency distribution unit Aviva Vida y Pensiones are unaffected by this ruling,” McMillan added.
Aviva shares were Friday quoted up 0.8% at 538.00 pemce.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Comments
Leave a Reply
You must be logged in to post a comment.