ING Shareholders Approve Restructuring Plan

Netherlands-based ING Group's restructuring plan has been given the go-ahead by shareholders at an extraordinary general meeting.

The company will now separate its banking and insurance arms, carry out a rights issue of up to 7.5 billion euros and will eventually divest itself of its ING Direct USA unit. In October, ING filed the restructuring plan with the European Commission (BestWire, Oct. 26, 2009). The EC approved the plan in November.

ING said it intends to use the proceeds of the underwritten issue to repurchase 50% (5 billion euros) of Core Tier 1 securities and to mitigate the impact on capital of additional payments to the Dutch state, which bailed out the group through its Illiquid Assets Back-up Facility.

To win approval for its restructuring plan from the EC, ING agreed to make a series of additional payments to the Dutch state corresponding to an adjustment of the fees for the IABF. These extra payments will amount to a net present value of 1.3 billion euros, which will be booked as a one-off pretax charge in the fourth quarter of 2009.

According to ING, all insurance and investment management activities will be divested "over time," and will be done either through initial public offerings, sales or a combination of the two. The group said it also needs to divest its ING Direct USA operation by 2013 in order to get EC approval.