a decisive step in what it termed its accelerated solvency plan
with the placing of 150 million new shares with institutional
investors. The issue which Fortis said attracted “substantial”
interest raised €1.5 billion ($2.35 billion) and was pitched at €10
per new share, 36 percent below its closing price on 30 May
2008.
The share issue which follows the raising of €625 million via a
perpetual subordinated bond issue in late-May forms part of a
strategy to increase solvency by more than €8 billion.
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Another step taken to achieve the €8 billion target was the
announcement that an interim dividend would not be paid this year.
This, said Fortis, would enhance solvency by €1.3 billion. In
addition, a proposal to pay the full-year 2008 dividend in shares
will be made to Fortis’ annual general meeting in March 2009.
Other solvency enhancing steps proposed by Fortis include a
property sale and lease-back transaction for around €1.5 billion,
issuance of non-dilutive capital instruments up to €2 billion and
additional disposals of “mature non-core assets.”
Fortis’ market capitalisation currently stands at about €23 billion
compared with €40 billion at the end of 2007. The latter figure
reflected the impact of Fortis’ €13.4 billion two-for-three rights
issue completed in October 2007 as part of the financing of its
€24.7 billion portion of the purchase price of Netherlands bank ABN
AMRO together with its consortium partners Banco Santander and
Royal Bank of Scotland.
