ageas SA/NV and ageas N.V. ("Ageas") and ABN AMRO Group N.V. and ABN AMRO Bank N.V. ("ABN AMRO") have agreed to settle the legal proceedings concerning ABN AMRO Capital Finance Ltd. (former Fortis Capital Company Ltd. "FCC") and the Mandatory Convertible Securities ("MCS"). This settlement also brings to a close all outstanding disputes between the Dutch State and Ageas in relation to the equity transactions which resulted in the take-over of the Dutch activities of the former Fortis group by the Dutch State on 3 October 2008. NL Financial Investments, the majority shareholder of ABN AMRO, co-signed this agreement on behalf of the Dutch State.
The settlement will lead to a one-off cash payment by ABN AMRO to Ageas of EUR 400 million at the latest on 5 July 2012. This payment will be recorded as a net profit in the half year results of Ageas representing about EUR 0.16 per share.
The preference shares of FCC and the MCS were issued in 1999 and 2007 respectively by entities that belonged to the former Fortis group. Following the break-up of the former Fortis group, there was no agreement on whether and/or how to share the cost of conversion of these instruments among the entities involved. On 29 June 2009 Ageas made a EUR 362.5 million cash payment for the FCC and on 7 December 2010 Ageas converted the MCS into Ageas shares. Ageas initiated two legal proceedings in the Netherlands regarding these disagreements. This settlement now discontinues these legal proceedings.
CEO Bart De Smet said: "This settlement is a new, major step forward in solving the outstanding legacy issues. Ageas has consistently indicated its preference for an amicable out-of-court settlement between all parties, rather than lengthy legal procedures. Today, we are pleased that our common efforts over the past months have finally resulted in a positive outcome for Ageas and a further reduction of the complexity of the Group. More than ever before, our focus will now be on the execution of our insurance strategy."
Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and UK. It is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player, through AG Insurance, and in the UK, it has a strong presence as the third largest player in private car insurance and the over 50's market. It employs more than 13,000 people and has annual inflows of more than EUR 17 billion.
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Source: Ageas via Thomson Reuters ONE