ING announces terms for EUR-7.5-billion rights issue
The Dutch bank would issue 1.7 billion new shares to EUR 4.24.
The Hague – Dutch bank and insurance group ING announced on Friday it would issue 1.7 billion new shares at EUR 4.24 euros apiece to raise EUR 7.5 billion to pay back government emergency funding.
"The share capital of ING will be increased by EUR 7.5 billion through the issue of 1,768,412,544 new shares," it said in a statement.
"The issue price is set at 4.24 euros per share", less than half Thursday's closing stock exchange price of EUR 8.92.
On Friday, ING unveiled the terms of the deal on Friday, already having announced last month that it would raise EUR 7.5 billion.
It plans to repay some EUR 5 billion in state aid plus EUR 950 million in interest on the EUR 10 billion the government extended to the it in October 2008 and January this year to help it through the worst of the global financial crisis.
It was also required by the European Commission to pay the state another EUR 1.3 billion in fees.
The banking group reported a EUR-499-million net profit in the third quarter of 2009 from a loss of EUR 478 million in the same period last year.
"This rights issue is a critical component of the measures we announced to regain our independence and to chart a clear course forward," ING chief executive officer Jan Hommen said.
"The Dutch State has indicated it is open to discussing modification of the repayment terms of the second half of the Core Tier 1 Securities, which we plan to repay from potential divestment proceeds and retained earnings."
AFP / Expatica