NETHERLANDS - Dutch paints giant, Akzo Nobel will pay up to €500m into its UK subsidiary's €1.9bn pension fund in the second or third quarter of this year, the company announced today.
The initial sum will come from the €11bn sale of Akzo Nobel's pharmaceutical unit, Organon to US Schering-Plough Corporation.
Akzo Nobel said it would start injecting cash into the fund as part of a wider initiative to wipe out the fund's deficit, which is estimated at between €1bn and €1.5bn.
Rob Frohn, chief financial officer, said in February that Akzo Nobel wants to wipe out the deficit, caused by an aggressive investment strategy between 2001 and 2003, in the coming five to ten years.
Nobody at the company was available for further comment on future payments into the UK defined benefit fund.
"This is not an urgent problem, but nonetheless a problem, which we have had for years," a spokesman told IPE in February.
The company has said that it will also start discussions with the UK pension fund trustees about changing the structure of the fund and its asset allocation.