Belgium, Luxembourg, Netherlands partially nationalise Fortis
The Belgian, Dutch and Luxembourg governments rode to the rescue of Fortis with a 11.2 billion euro bailout to keep the US-born financial crisis from claiming a victim in Europe.
By Agencies |
BRUSSELS: The Belgian, Dutch and Luxembourg governments rode to the rescue of Fortis with a 11.2 billion euro bailout to keep the US-born financial crisis from claiming a victim in Europe.
Top officials from the three countries yesterday hastily hammered out plans to partially nationalise Fortis over the weekend after the banking and insurance group failed to dispel liquidity concerns in recent days.
"The important thing is that it's a Benelux agreement. The governments are directly intervening to take control of the three banks in the three countries," Belgian Finance Minister Didier Reynders told a press conference.
"We said that we would not leave any client by the wayside," he said.
Fortis saw nearly a quarter of its value on the stock market wiped out over the last week as it battled to dispel repeated concerns about its liquidity, insisting as recently as Friday that it had ample funding.
Despite such assurances, Fortis shares plummeted more than 20 per cent on Friday alone, and that was before the surprise announcement that chief executive Herman Verwilst was stepping down.
Under the hastily arranged rescue, Belgium will make the biggest contribution, taking a 49 per cent stake in the Belgian arm of the company, Fortis Bank NV/SA, for 4.7 billion euros.
The Dutch government will take a 49 per cent stake in the Dutch arm, Fortis Bank Nederland Holding, for 4.0 billion euros and Luxembourg will buy a 49 per cent stake in Fortis Banque Luxembourg for 2.5 billion euros through a convertible loan.
Top officials from the three countries yesterday hastily hammered out plans to partially nationalise Fortis over the weekend after the banking and insurance group failed to dispel liquidity concerns in recent days.
"The important thing is that it's a Benelux agreement. The governments are directly intervening to take control of the three banks in the three countries," Belgian Finance Minister Didier Reynders told a press conference.
"We said that we would not leave any client by the wayside," he said.
Fortis saw nearly a quarter of its value on the stock market wiped out over the last week as it battled to dispel repeated concerns about its liquidity, insisting as recently as Friday that it had ample funding.
Despite such assurances, Fortis shares plummeted more than 20 per cent on Friday alone, and that was before the surprise announcement that chief executive Herman Verwilst was stepping down.
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Under the hastily arranged rescue, Belgium will make the biggest contribution, taking a 49 per cent stake in the Belgian arm of the company, Fortis Bank NV/SA, for 4.7 billion euros.
The Dutch government will take a 49 per cent stake in the Dutch arm, Fortis Bank Nederland Holding, for 4.0 billion euros and Luxembourg will buy a 49 per cent stake in Fortis Banque Luxembourg for 2.5 billion euros through a convertible loan.
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