Aegon raises EUR 1 bln through shares

14th August 2009, Comments 0 comments

The Dutch insurer sells EUR 1 billion worth of shares to repay partial state aid after announcing a second-quarter loss.

The Hague – Dutch insurer Aegon raised EUR 1 billion Thursday by issuing shares to repay part of a state investment after reporting a second-quarter loss of EUR 161 million.

"Aegon has completed a one billion equity euro issue via an accelerated bookbuild," a company statement said. "The issue was conducted ...through the sale of a combination of new common shares and existing treasury shares.

"The issue comprised 157,822,000 new common shares and 32,654,191 treasury shares of AEGON N.V. with a nominal value of 0.12 euros."

They were sold at EUR 5.25 per share on Euronext in Amsterdam and at USD 7.50 (EUR 5.25) in New York.

"Aegon intends to use the proceeds of the equity issue to repay up to EUR 1 billion of the EUR 3 billion of core capital obtained last year from its largest shareholder, Vereniging Aegon, funded by the Dutch State," it said.

This amounted to up to 10 percent of the company's total issued shares.

"The decision to repay by 1 December 2009 is conditional on Aegon’s capital position and the outlook for the economy and financial markets not deteriorating materially," said an Aegon statement.

It also required the consent of the Dutch central bank.

"It has been our intention to repay the EUR 3 billion to the Dutch government at the earliest opportunity, provided it is both feasible and responsible to do so," the statement quoted Aegon chief executive officer Alex Wynaendts as saying.

The insurer's second-quarter outcome was down from a net profit of EUR 276 million in the same period of last year, mainly owing to a loss of EUR 385 million incurred through the sale of its Taiwanese insurance activities.

The results were worse than forecast by analysts polled by Dow Jones Newswires, who had expected a net loss of EUR 35.1 million for the quarter.

Aegon also reported impairments of EUR 393 million, about half of which is from the value of US housing market assets.

"Because of uncertain economic conditions, Aegon still expects an elevated level of asset impairments in its investment portfolio in 2009 compared with its long-term assumptions," said the statement.

Underlying earnings before tax amounted to EUR 404 million, 32 percent lower than a year ago and less than the EUR 459 million predicted by analysts.

The company reported new life policy sales to the tune of EUR 469 million, and said it had freed up EUR 1.6 billion in capital in the first half of the year.

It had total deposits of EUR 5.6 billion and was "well on track" to achieve a planned EUR 150 million cost reduction for the year.

Aegon said it would declare no interim dividend for 2009.

AFP / Expatica

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