LONDON, Sept 26 (Reuters) - Aviva, Britain's second-biggest insurer, has sold more of its holdings of distressed Italian government debt in an effort to bolster its balance sheet, it said on Wednesday.
Aviva, in the throes of a restructuring after investors forced out its chief executive in May, "made an additional disposal of Italian sovereign debt during September," the company said in a management presentation published on its website.
The sale comes on top of a 2 billion euro ($2.59 billion)disposal of Italian sovereign debt in June which reduced Aviva's total holding to about 5 billion euros as of July 6, finance chief Pat Regan said at the time.
Aviva, battling to win over investors irked by a weak share price performance, aims to turn itself around by shedding underperforming businesses, cutting costs, and insulating its capital reserves against financial market fluctuations.
The company's regulatory capital buffer fell by a third between July and September last year as the escalating eurozone crisis weighed on the value of bonds issued by heavily indebted governments, stirring fears over its capital strength.
Italian government bonds have fallen steeply in value over the past two years, reflecting worries over the Italy's creditworthiness as its membership of the euro constrains its ability to tackle weak growth and rising debts.
Aviva generated about 40 percent of its operating profit in mainland Europe last year, and holds European sovereign debt partly to generate the income it needs to meet its financial obligations to European policyholders.
Aviva shares were down 2.5 percent by 1100 GMT, underperforming a 2 percent fall in the Stoxx 600 European insurance share index.