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Aviva (AV.)

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Dod101
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Re: Aviva (AV.)

#492380

Postby Dod101 » April 7th, 2022, 8:03 am

With no redemption feature, all that Aviva can do, as they discovered not so long ago, is try to persuade the holders of their Prefs to sell them but given the high interest rate attaching to them (no doubt why Aviva want to buy them out) all they can do is to try to persuade the holders with a high enough premium, that is throw money at them.

The shares issued for the purpose of the capital return are quite specific in their purpose and of course bear no comparison to the 'true' Prefs as there is no benefit to any holder except the capital redemption.

Dod

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Re: Aviva (AV.)

#492502

Postby GoSeigen » April 7th, 2022, 2:13 pm

Dod101 wrote:With no redemption feature, all that Aviva can do, as they discovered not so long ago, is try to persuade the holders of their Prefs to sell them but given the high interest rate attaching to them (no doubt why Aviva want to buy them out) all they can do is to try to persuade the holders with a high enough premium, that is throw money at them.

The shares issued for the purpose of the capital return are quite specific in their purpose and of course bear no comparison to the 'true' Prefs as there is no benefit to any holder except the capital redemption.


Aviva have no right to redeem, we now agree on that. I also agree they have the option of offering a premium for the existing preference shares. However that is not their only option. As they made very clear a few years back, they are also able to repay the preference shareholders at par value in a capital reduction. A capital reduction [in contrast to a redemption] requires the approval of both shareholders (>75%) and the High Court so is not a straightforward or guaranteed option as Aviva themselves recognise. The High Court should not present a problem. Regards a shareholder vote, Aviva believe there is a material risk that they would not be able to achieve the 75% majority of ordinary and preference shareholders that they would require to carry through the capital reduction. Thus they recognise that they might need a "sweetener" to successfully carry though a capital reduction. That sweetener would not necessarily need to be large enough to fill the gap between par and market value of those preference shares.

That is the background context to the exchange between Alaric and me earlier in the thread. Clearly Aviva have decided to skirt this question for the time being and are returning capital to ordinary shareholders without either removing the preference share liability or indeed offering the preference shareholders any of the capital being returned. As I've commented before that is an unambiguous negative for the prefs.

GS

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Re: Aviva (AV.)

#492505

Postby scrumpyjack » April 7th, 2022, 2:21 pm

I don't think it is in any way 'negative' for the preference shares. It simply reflects the fact that, to all intents and purposes, preference shares are a form of fixed interest undated debenture, so the market expects them to be treated that way. They are in no way entitled to share in the company's profit or loss, which belongs entirely to ordinary shareholders or the company's right to do what they want with their capital and assets, subject to respecting any required asset and dividend cover provisions set out in the articles.

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Re: Aviva (AV.)

#492544

Postby Dod101 » April 7th, 2022, 4:06 pm

I suppose the only negative for the Pref shareholders in the current circumstances is that, some might argue, there has been or will be a reduction in the assets on which the Pref shareholders rely to cover their rather generous coupon.

GS's comments are interesting though because clearly if, as Aviva have I think done, bought their own shares in the market and then cancelled them, that is a capital reduction surely? They did that without getting Court clearance and without triggering any need to get the agreement of the Pref shareholders. They did of course have the approval of the ordinary shareholders for a limited share buyback.

Dod

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Re: Aviva (AV.)

#492552

Postby scrumpyjack » April 7th, 2022, 4:16 pm

Dod101 wrote:I suppose the only negative for the Pref shareholders in the current circumstances is that, some might argue, there has been or will be a reduction in the assets on which the Pref shareholders rely to cover their rather generous coupon.

GS's comments are interesting though because clearly if, as Aviva have I think done, bought their own shares in the market and then cancelled them, that is a capital reduction surely? They did that without getting Court clearance and without triggering any need to get the agreement of the Pref shareholders. They did of course have the approval of the ordinary shareholders for a limited share buyback.

Dod


The 'capital' of the company represented by ordinary shares is normally the par value of those shares (in this case 25p per share), not the NAV of the shares. It is many decades since I had to deal with this sort of stuff as a chartered accountant, but that is why in addition to the par value of the shares there are often capital reserves, which are non distributable, and revenue reserves (usually accumulated undistributed profits) which are distributable. It is all a rather arcane area and I think company law has changed on this since my day, but GS referred to the provision in Aviva's articles which said something about having to keep assets 10 times the pref share capital as cover. Anyway an absolutely trivial amount. It is with that background that i made my earlier point that the company is basically free to deal with the company's profit and assets without concerning themselves with the preference shares, which have virtually no rights other than to get their divi and get their capital in a winding up, subject to anything the articles say.

They do not really share in the success of the company and have preference if it collapses, but then it is usually too late!

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Re: Aviva (AV.)

#493809

Postby scrumpyjack » April 12th, 2022, 6:00 pm

I see they have announced the return of capital arrangements.
It is 101.69p per share held as at the close of business on 13th May
They will then have a share consolidation 76 new shares for each 100 held

This is per an email from HL

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Re: Aviva (AV.)

#493821

Postby scrumpyjack » April 12th, 2022, 7:07 pm

The cash is paid on 19th May

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Re: Aviva (AV.)

#497630

Postby Ricksure » April 30th, 2022, 9:24 am

The cash is paid on 19th May


According to "dividenddata.co.uk" the 19th May is the dividend payment and the consolidation payment paid 31st May

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Re: Aviva (AV.)

#497643

Postby scrumpyjack » April 30th, 2022, 10:11 am

Ricksure wrote:
The cash is paid on 19th May


According to "dividenddata.co.uk" the 19th May is the dividend payment and the consolidation payment paid 31st May


I was basing that on a newspaper report. I'm sure that website is far more accurate than the hacks, though the Aviva announcement said 'on or before 31st May'

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Re: Aviva (AV.)

#497645

Postby scrumpyjack » April 30th, 2022, 10:16 am

This is what Hargreaves Lansdown emailed me.

"If plans go ahead, we'll be in touch around 14 May 2022 to inform you of your expected new holding. Your new Aviva plc holding will be updated on 16 May 2022 and the cash will be paid on 19 May 2022."

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Re: Aviva (AV.)

#497647

Postby kempiejon » April 30th, 2022, 10:22 am

https://www.aviva.com/investors/return-of-capital-2022/

The key dates are as follows:
Tuesday 29 March 2022 - Record date for ADS Holder entitlement to vote at General Meeting
Tuesday 5 April 2022 - Publication of Circular and Notice of General Meeting
Monday 11 April 2022 - Posting of Circular and Notice of General Meeting
Thursday 5 May 2022 - Record date for Shareholder entitlement to vote at General Meeting
Monday 9 May 2022 - General Meeting
6pm on Friday 13 May 2022 - Record time for entitlement to B Shares and Share Consolidation in respect of Existing Ordinary Shares
By Tuesday 31 May 2022 - Redemption payment settlement date for B shares
Promptly after Monday 6 June 2022 - Redemption payment settlement date for ADSs
Please note that the full timetable is set out in the Circular and dates are subject to amendment as set out in the Circular.

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Re: Aviva (AV.)

#498108

Postby GrahamPlatt » May 3rd, 2022, 9:29 am

kempiejon wrote:By Tuesday 31 May 2022 - Redemption payment settlement date for B shares.


Will that happen automatically, or would you have to elect to participate in the conversion to cash?

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Re: Aviva (AV.)

#498111

Postby daveh » May 3rd, 2022, 9:36 am

GrahamPlatt wrote:
kempiejon wrote:By Tuesday 31 May 2022 - Redemption payment settlement date for B shares.


Will that happen automatically, or would you have to elect to participate in the conversion to cash?


It should happen automatically as the conversion to cash is not optional.

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Re: Aviva (AV.)

#498697

Postby scrumpyjack » May 5th, 2022, 5:17 pm

Note that the Aviva document says that the proceeds should be credited to Crest accounts by 19th May if the timetable goes according to plan.

idpickering
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Re: Aviva (AV.)

#500667

Postby idpickering » May 16th, 2022, 7:06 am

Return of Capital Update.

Further to the publication on 5 April 2022 of the explanatory circular regarding the B Share Scheme and Share Consolidation (the "Circular"), and the passing of all the required Resolutions at the General Meeting of Aviva plc (" Aviva " or the " Company ") on 9 May 2022, the Company announces that the allotment and issue of 3,687,322,000 B Shares relating to the B Share Scheme (there being 3,687,322,000 Existing Ordinary Shares in issue at the Record Time) will occur today. The Share Consolidation and admission of the New Ordinary Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities are due to take place no later than 8.00 a.m. today.

This follows the announcement on 2 March 2022 that Aviva intends to return £3.75 billion to the holders of its ordinary shares (the "Shareholders") and holders of American depositary shares representing ordinary shares ("ADSs") in the form of a payment of 101.69 pence per ordinary share. This is in addition to the £1 billion share buy-back which was completed on 31 March 2022.

No application has been, or will be, made to the FCA or to the London Stock Exchange, respectively, for any of the B Shares to be admitted to the Official List or to trading on the London Stock Exchange's main market for listed securities, nor will the B Shares be listed or admitted to trading on any other recognised investment exchange.

No share certificates will be issued in respect of the B Shares and no CREST accounts will be credited with the B Shares.

Assuming there is no unexpected change in the position of the Company or market conditions generally, the Company intends that the B Shares will be redeemed tomorrow for 101.69 pence per B Share. It is expected that Shareholders and holders of ADSs entitled to receive payments in respect of the proceeds of the redemption of the B Shares will receive payment by 31 May 2022 in respect of the Existing Ordinary Shares, and by 6 June 2022 in respect of the ADSs.

Unless a holding of Existing Ordinary Shares is exactly divisible by 100, a Shareholder will have a fractional entitlement to a New Ordinary Share following the Share Consolidation. Fractional entitlements arising from the Share Consolidation will be aggregated into New Ordinary Shares and sold in the market on behalf of such Shareholders. The net proceeds of the sale (after deduction of all expenses and commissions incurred) will be distributed pro rata to relevant Shareholders. The electronic payments in respect of the net proceeds of sale will be despatched to relevant Shareholders or CREST accounts credited with the net proceeds, as appropriate, together with certificates for New Ordinary Shares, where applicable, by 31 May 2022.

At or around the same time as the Share Consolidation, the Depositary will consolidate the ADSs in the same manner as the Existing Ordinary Shares to reflect the Share Consolidation, with fractional entitlements being sold and net cash proceeds (net of applicable fees, taxes, and expenses) being distributed to applicable ADS Holders by 6 June 2022.

In accordance with the FCA's Disclosure Guidance and Transparency Rule 5.6.1(A) and further to the announcement on 9 May 2022, the Company confirms that, post completion of the previously announced B Share Scheme and Share Consolidation, the Company's total issued share capital will consist of 2,802,364,720 Ordinary Shares of 32 17/19 pence each, with each Ordinary Share carrying the right to one vote.


https://www.investegate.co.uk/aviva-plc ... 00055044L/

Ian.

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Re: Aviva (AV.)

#500874

Postby idpickering » May 17th, 2022, 7:10 am

Return of Capital Update - Redemption of B shares.

Following its announcement on 16 May 2022 in relation to the proposed £3.75 billion return of capital by Aviva plc (" Aviva " or the " Company ") by way of a B Share Scheme, the Company confirms that the redemption of the B Shares issued pursuant to the B Share Scheme will occur today. This is in addition to the £1 billion share buy-back which was completed on 31 March 2022.

It is expected that the holders of Ordinary Shares entitled to receive payments in respect of the proceeds from the redemption of the B Shares will receive such payment by 31 May 2022, and the holders of ADSs entitled to receive payments in respect of the proceeds from the redemption of the B Shares will receive such payment by 6 June 2022 in order to allow for the conversion from pounds sterling to US dollars by the Depositary .

In accordance with the FCA's Disclosure Guidance and Transparency Rule 5.6.1(A) and further to the announcement on 16 May 2022, the Company confirms that, post completion of the previously announced B Share Scheme and Share Consolidation, the Company's total issued share capital consists of 2,802,364,720 Ordinary Shares of 32 17/19 pence each, with each New Ordinary Share carrying the right to one vote. The total number of voting rights in the Company is therefore 2,802,364,720.

Capitalised terms used in this announcement which are not otherwise defined have the same meaning as set out in the explanatory circular regarding the B Share Scheme and the Share Consolidation, and containing a notice of general meeting, published on 5 April 2022 (the "Circular").

A copy of the Circular is available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at http://www.aviva.com/ return-of-capital


https://www.investegate.co.uk/aviva-plc ... 00076789L/

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Re: Aviva (AV.)

#500902

Postby Steveam » May 17th, 2022, 9:45 am

How does the return of capital impact my tax position in an unprotected account? Does my base cost change for CGT calculation? I should know this but can’t recall. (What a year: TATE, Aviva, GSK, BHP - far too much activity for me. I just want to chill out and receive the dividends).

Best wishes, Steve

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Re: Aviva (AV.)

#500906

Postby EthicsGradient » May 17th, 2022, 9:54 am

Steveam wrote:How does the return of capital impact my tax position in an unprotected account? Does my base cost change for CGT calculation? I should know this but can’t recall. (What a year: TATE, Aviva, GSK, BHP - far too much activity for me. I just want to chill out and receive the dividends).

Best wishes, Steve

It looks like it does affect it - their FAQs:

I am an individual and tax resident in the UK. Can you tell me any more about my tax position?

Broadly speaking, for UK resident individual Shareholders who hold their shares as investments and did not acquire them from their employment, the receipt of cash under the B Share Scheme may give rise to a capital gain for the purposes of capital gains tax. In calculating the amount of any gain, Shareholders should generally be able to subtract from the cash received a proportion of their base cost of their Existing Ordinary Shares. Any gain will be taxable at applicable capital gains tax rates, and Shareholders may be able to take advantage of their annual exempt amount (£12,300 for 2022/23). The Share Consolidation should not have any material UK tax consequences.

An illustrative worked example will be made available on the Company’s website shortly after the implementation of the B Share Scheme and Share Consolidation.

More detail is contained in Part IV of the Circular and if you are in any doubt about the potential tax consequences of the B Share Scheme or the Share Consolidation for you, you should consult your own independent professional tax advisers.

https://www.aviva.com/investors/return-of-capital-faqs/

I'm lucky enough to hold mine in a SIPP, so haven't looked further. I remember a return of capital from a different share involved a figure from the company that said how much of your cost basis to apply to the continuing shareholding, and how much to the returned capital.

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Re: Aviva (AV.)

#500907

Postby daveh » May 17th, 2022, 9:55 am

Steveam wrote:How does the return of capital impact my tax position in an unprotected account? Does my base cost change for CGT calculation? I should know this but can’t recall. (What a year: TATE, Aviva, GSK, BHP - far too much activity for me. I just want to chill out and receive the dividends).

Best wishes, Steve

Its treated as a capital gain and your base cost of the remaining shares will change. In the FAQ on the Aviva website for the return of capital they say a worked example will be posted shortly after the return of capital has happened - which is today - in the sense of the B shares being redeemed. So far (when I checked half an hour ago) it hasn't appeared yet (or I couldn't find it). If I can't find the example I'll use yesterdays close for the shares (394.65 and the redemption price for the B shares to apportion the base cost between the new shares and the B shares).

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Re: Aviva (AV.)

#500912

Postby Bouleversee » May 17th, 2022, 10:12 am

I haven't heard a word from IWeb about this. They hold my Aviva shares in an ISA. Is this something that will happen automatically without any action from me?


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