Dutch insurer ING, which has insurance and financial services operations in Windsor, won strong support from shareholders for a heavily discounted rights issue, helping ING cut its reliance on state aid and clearing it to launch a program of mandated asset sales, Reuters reports.
ING said today that investors took up 97 percent of almost 1.77 billion new shares in the 7.5 billion euro ($10.9 billion) offering, which was offered at 37.3 percent below the theoretical ex-rights price, Reuters said on its Web site.
“This is good, it’s absolutely successful,” said Fred Huibers from Dutch asset manager Het Haags Effektenkantoor, which owns no ING shares.
ING plans to use 5.61 billion euros of the proceeds from its offering to partly repay the Dutch government next Monday for a bailout it received in Oct. 2008, Reuters reported.
ING shares were up 73 cents, or 7.7 percent, at $10.17 in late morning trading.
ING announced the rights issue on Oct. 26 to coincide with news of the breakup plan, agreed with the European Commission in return for the bailout.
ING is selling off its insurance assets, its investment management activities, its Dutch mortgage operations and its U.S. online bank by the end of 2013.
What remains will be a heavily European-focused retail bank, with some investments in Asia.
ING will also use some of the rights issues proceeds to pay the state more for a 22 billion euro asset guarantee scheme agreed to last January. That larger payment was another condition of the EU deal.
Huibers said with the rights issue out of the way, how ING conducts the breakup will determine how its shares perform in the near future.
“Will it be in small steps at attractive prices or perhaps a big step but for a lesser price? I would like to see relatively small sales at good prices to show ING can resist pressure to sell for bottom prices,” he said.