Aegon taps government for cash

28-10-2008

Aegon taps government for cash
Dutch insurer Aegon has received a €3 billion (£2.4 billion) investment from the state as a 'buffer' in case global markets fall further.

The company said the cash was provided via Vereniging Aegon, the firm's largest shareholder, in return for a stake in the firm.

The government will receive 750 million shares in the company, although they will carry no voting rights. The Dutch state will also nominate two representatives to Aegon's board.

Aegon has committed to maintain a capital position "well above" its AA rating requirements.

Alex Wynaendts, chief executive of Aegon, said: "We welcome this additional capital buffer that the Dutch State has provided via Vereniging Aegon in this time of uncertainty and unprecedented economic turmoil.

"There should be no doubt whatsoever about AEGON’s ability to fulfill its long-term obligations."

In addition, Aegon said it would not be paying a final dividend for 2008.

Aegon said it would release its third quarter results in November as planned, which are expected to show a net loss of approximately €350 million (£279.4 million).

The terms of the capital injection were similar to those of Ing, which has also received cash from the Dutch government.

The Dutch government said on October 9th that it would make €20 billion (£16 billion) of capital available to companies in the financial sector that are fundamentally sound and viable.

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