ING announced today that the European Commission has formally approved the restructuring plan submitted by ING. Under European rules, companies that received state support in the context of the financial crisis are required to submit a restructuring plan to demonstrate their long-term viability and prevent undue distortions of competition.
With this decision the Commission has also given final clearance for the issuance of Core Tier 1 securities to the Dutch State and for the Illiquid Assets Back-up Facility
As announced on 26 October 2009, in line with our Back to Basics programme to reduce complexity, key elements of ING’s restructuring plan include a complete separation of banking and insurance (including ING Investment Management).
Under the plan, ING will also divest ING Direct USA and a new company comprising selected mortgage and consumer lending activities in the Netherlands.
In order to get approval for the restructuring plan, ING has agreed to make a series of additional payments to the Dutch State corresponding to an adjustment of the fees for the Illiquid Assets Back-up Facility amounting to a net present value of EUR 1.3 billion before tax.
In conjunction with the restructuring plan, ING has reached an agreement with the Dutch State to facilitate early repayment of half of the Core tier 1 securities issued in 2008. ING intends to use the opportunity to repurchase EUR 5 billion of Core Tier 1 securities in December 2009, financed by an underwritten rights issue.
Jan Hommen, CEO of ING commented: “This decision is an important step to leave the financial crisis behind us and create a new and exciting future for ING. The formal approval of the European Commission further clears the path for the next phase of our Back to Basics programme, which we will execute to support the success of our businesses in the interests of all our stakeholders.”
The above mentioned strategic measures are expected to be executed by the end of 2013. The strategic decision to separate banking and insurance operations (including Investment Management) and the proposed rights issue will be presented for approval to an Extraordinary General Meeting of shareholders on 25 November 2009. In addition, several of the intended measures are conditional on the approval or advice of the Works Council and various regulators.
