Aegon to repay Brussels state aid

DUTCH insurance firm Aegon yesterday allayed investor fears it would go cap in hand to shareholders to pay off its state aid bill, after it announced terms of a payback deal approved by the European Commission.

Aegon NV's shares rose 7.7 per cent after it said that this month it would repay a further €500 million (413m) of the €3 billion government injection it received in 2008.

Aegon, owner of Edinburgh-based Aegon UK, repaid a third of the money in November and cionfirmed it would return the remaining €2bn by the end of June 2011.

Analysts said it was "positive" that Aegon was able to repay the first tranche from internal resources, although some suggested the firm might have to still raise funds from shareholders to pay off the rest of the €1.5bn.

Aegon chief executive Alex Wynaendts said he "can't rule out any options at this point in time" when asked about a possible share sale but he said the payout could be funded through a number of options, including generating cash from excess capital in its businesses or selling assets.

Last week the firm confirmed it was "receiving interest" in its Transamerica Re business, which was put on the market in June with a book value of €1.6bn.

Although the business is the US's third-largest reinsurer, it is just a portion of Aegon's US Transamerica Life Insurance operation.