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Ageas' mandatory conversion stands following favorable court ruling
By Angela McDaniels
Tacoma, Wash., March 23 - Ageas NV and Ageas NV/SA said the Brussels Commercial Court ruled in favor of Ageas, dismissing all claims initiated by former holders of the company's €2 billion of 8.75% mandatory convertible securities.
The company mandatorily converted the securities on Dec. 7, 2010. In response, a group of holders initiated legal proceedings, arguing that a general meeting of holders has the power to unilaterally postpone the maturity date of the convertibles and modify some terms of the conversion of the securities.
The holders voted at a meeting to postpone the maturity date of the convertibles until Dec. 7, 2030. The plaintiffs requested the validation of that decision. They also asked to annul the conversion or, alternatively, to be awarded damages.
As a result of the court decision, the mandatory conversion is unaffected and no compensation is due.
The convertibles were issued on Dec. 7, 2007 by Fortis Bank Nederland (Holding) NV, Fortis Bank SA/NV, Fortis SA/NV and Fortis NV. Fortis Bank Nederland became ABN Amro Bank NV when Fortis was dismantled in 2008, and the remaining issuers were later renamed Ageas.
ABN Amro Bank, now owned by the Dutch state, remained the primary co-obligor of the convertibles.
The securities were converted into 106.73 million Fortis (now Ageas) shares. The closing share price on the conversion date was €1.88 (Euronext: AGS), making those shares worth €200.65 million - substantially less than the securities' €2 billion principal amount.
Ageas is an insurance company with headquarters in Brussels and Utrecht, the Netherlands.
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