Aegon gets $3.7 billion funding from Dutch government

29 October 2008

Mumbai: Dutch insurance giant Aegon NV has taken a $3.7 billion (3 billion-euro) funding from the Dutch government that the company said would help shore up its finances amidst the global financial turmoil.

The Dutch government will provide the funds through Association Aegon, the company's biggest shareholder. Aegon in turn will issue 750 million non-voting securities at €4 each to Association Aegon.

The company will be able to buy back the securities at 150 per cent of face value, or €6 a share, or convert them into shares. The securities carry a coupon of at least 8.5 per cent.

Aegon also has the option of buying one third of the shares before October next year at a reduced rate.

The Dutch finance ministry said, unlike the nationalised Benelux financial conglomerate Fortis, Aegon was a ''healthy and well-run'' insurance business.

But, with two-thirds of its operations based out of Baltimore in the US, where it operates insurer Transamerica,  Aegon is also one of Europe's most vulnerable companies to the financial market crisis.