Fortis holding statement in respect of preference shares issued by
Fortis Capital Company Limited in 1999*
Fortis Capital Company Limited ("FCCL"), Fortis Bank Nederland
(Holding) N.V. ("FBNH") and their common shareholder the Dutch State
challenge the agreed compensation arrangements in favor of Fortis
holding in respect of the Cash Settlement** scheduled for 29 June
2009.
Fortis holding refers to its press release of 27 March 2009 in
respect of the decision by FCCL not to cancel its outstanding Class
A1 preference shares (ISIN code GB0057047275) on 29 June 2009.
Following this decision, holders representing a principal amount of
EUR 362.5 million made use of their option to elect Stock
Settlement*** and to convert their Class A1 preference shares into
ordinary Fortis shares.
Fortis holding in turn received permission from its regulator for
Cash Settlement as foreseen under the terms of the instrument. FCCL
subsequently confirmed that the Class A1 preference shares for which
conversion has been asked will be redeemed in cash by FCCL on 29 June
2009.
Under arrangements put in place at the time of issuing the instrument
in 1999, Fortis SA/NV and Fortis N.V. are to receive simultaneous
compensation in the form of new shares to be issued by FBNH when
meeting their obligations towards FCCL in the framework of Cash
Settlement.
The Stock/Cash Settlement mechanism as originally foreseen was only
meant to be used in the extreme situation that FBNH would be
insufficiently capitalized to call the securities on 29 June 2009.
Instead of ensuring that FBNH is adequately capitalized to allow it
to call the Class A1 preference shares, the Dutch State chose not to
follow this route and instead demands pursuant to the Support
Agreement that the Fortis parents provide FCCL with EUR 362.5 million
in cash to perform Cash Settlement. Simultaneously, however, it
refuses to accept the consequences of its decision and to provide
Fortis with the necessary compensation.
Fortis holding understands the reluctance of the Dutch State to see
Fortis re-enter the capital of FBNH, however, this is the pre-agreed
result of its decision not to call the instrument. Fortis holding
stresses that it remains open to discuss any acceptable alternative
form of compensation.
FCCL is expected today to file summary proceedings to claim EUR 362.5
million in cash from Fortis holding without accepting any
compensation rights.
Fortis holding will challenge this position and will do whatever
appropriate to make sure that its legitimate rights and the interests
of its shareholders are protected. It is conscious of the concerns
that this situation might raise with the holders of the Class A1
preference shares. Fortis holding fully acknowledges the rights of
the holders in respect of the Cash Settlement and stresses its
willingness to honour its obligations in this respect.
*Fortis Capital Company Limited is a Jersey company, 100% owned by
Fortis Bank Nederland (Holding) N.V. It was incorporated in 1999 and
issued EUR 450,000,000 Class A1 preference shares for the purpose of
strenghtening the Tier 1 capital of Fortis Bank Nederland (Holding)
N.V. Since the break-up of the Fortis group in October 2008, Fortis
Capital Company Limited is indirectly owned by the Dutch State.
** Redemption on demand of the holders through delivery by Fortis
holding to FCCL of cash.
*** Redemption on demand of the holders through delivery by Fortis
holding to FCCL of new shares.
Fortis holding (Fortis SA/NV and Fortis N.V.) consists of (1) a 75%
ownership of Fortis Insurance Belgium (2) Fortis Insurance
International, (3) a 45% stake in Royal Park Investments - a
structured credit portfolio entity - and (4) financial assets and
liabilities of various financing vehicles. Fortis Insurance Belgium
is overall market leader and a leading player in the Employee
Benefits market. The international insurance activities (Fortis
Insurance International) are located in the UK, where Fortis is the
third largest player in the market for private car insurance, France,
Hong Kong, Luxembourg (Non-Life), Germany, Turkey, Russia, Ukraine
and joint ventures in Luxembourg (Life), Portugal, with Millenniumbcp
Fortis being a clear market leader, China, Malaysia, India and
Thailand. Fortis currently employs over 10,000 people.
Press Contacts:
Brussels: +32 (0)2 228 82 92 Utrecht: +31 (0)30 226 32 61
Investor Relations:
Brussels: +32 (0)2 565 53 78 Utrecht: +31 (0)30 226 65 66
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.