Aviva decided against the sale because those parts of the business produce double-digit operating profit and are contributors to the group dividend
Aviva’s shares slid as much as 4% yesterday following the decision to ditch the idea of selling its Asian businesses in Singapore or joint venture in China.
Aviva had mulled a sale of the operations, but decided against it because those parts of the business produce double-digit operating profit and are contributors to the group dividend.
Aviva, whose ex-UK boss Andy Briggs landed a plum new role, will now look at Hong Kong, Vietnam and Indonesia for sale.
Paul De’Ath, an analyst at Shore Capital, said it was ‘disappointing for investors’ as it would make it tougher to return capital to shareholders or pay down debt.
He said Tulloch would now have to give a more detailed brief on where and when the £300m savings on cuts would be made annually.
He said: “Many investors and analysts assumed that at least some of the entities would be sold and the group would be able to use the sale proceeds to pay down debt or give capital back to shareholders.”
Tulloch faces a tough examination from investors and shareholders who have watched the share price languish in the doldrums for years.
However, Tulloch has expressed his determination to make the business stronger, stressing ‘adequate is not good enough’.
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