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Ageas says co-issuer of 8.75% convertibles seeks €885 million following protested conversion
By Angela McDaniels
Tacoma, Wash., Dec. 27 - Ageas NV and Ageas NV/SA said the Dutch state made two counterclaims against the company in connection with Ageas' €2 billion of 8.75% mandatory convertible securities, although litigation in court has not yet begun.
The counterclaims are for €675 million and €210 million, according to a company news release.
The convertibles were issued in December 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 Ageas shares as scheduled on Dec. 7 despite the protests of the holders and Dutch state.
Ageas said that under the agreement between the issuers, ABN Amro owes it €2 billion of ABN Amro shares in consideration of the shares issued by Ageas when the securities were converted.
The Dutch state disagreed and made the counterclaims. It believes the agreement was invalidated when it acquired the Dutch banking and insurance operations of the former Fortis.
The Dutch state unsuccessfully sought to buy back the securities to prevent the conversion.
The securities converted into 106.73 million Ageas shares. Based on an opening share price of €1.75 (Euronext: AGS) on Dec. 27, these shares are worth about €186.78 million.
Some holders of the €2 billion convertibles attempted to prevent the conversion because of the low price of Ageas shares. They argued that a general meeting of holders had the power to unilaterally postpone the maturity date of the convertibles and modify some of the conversion terms. The Commercial Court of Brussels disagreed, allowing Ageas to go ahead with the conversion.
Ageas is an insurance company with headquarters in Brussels and Utrecht, the Netherlands.
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