Fortis slumps 63% as trading resumes

GROUP RESTRUCTURE:SHARES IN Fortis, the Belgian-Dutch financial services group, slumped 63 per cent yesterday as they returned from suspension after the group outlined a drastically reduced business structure and asked to be exempt from reporting forthcoming quarterly results.

Fortis said it would not be able to report third-quarter earnings on November 3rd, as unravelling its corporate structure after a complex carve-up and nationalisation by the Benelux governments could not be done within a few days.

Fortis shares, which were suspended all last week, resumed trading yesterday morning and were down 63 per cent at €2 in Amsterdam and 64 per cent at €1.93 in Brussels.

The financial services group added there were risks from the still-unknown effects of third-quarter developments on its balance sheet and income statement.

Belgium's banking, finance and insurance commission (CBFA) said while Fortis was not required to publish full quarterly results, it was obliged to make "some form of quarterly declaration" and to seek approval for a new reporting date.

Earlier, Fortis said that as of June 30th the new slimmed-down company had total equity of €8.8 billion, including €7.4 billion of shareholders' equity. The number of outstanding shares was 2.47 billion.

"Fortis will publish full disclosure on the starting position of Fortis in its new constellation as soon as this can be provided," the company said in a statement.

Chief executive Filip Dierckx said all options were open on future strategy, including whether to remain listed in both Brussels and Amsterdam.

His own position was also to be decided and the group will call a shareholders' meeting within eight weeks to present its new structure.

The company said there had been no time to ask for approval for the carve-up, including partial sale to BNP Paribas, as Fortis had been threatened with going under.

Prior to the resumption in trading, analysts at Rabo Securities estimated the company's book value per share at €3, while KBC Securities estimated €3.8-€4.

Fortis said its expected net cash position of €10.5 billion would exceed its €9.4 billion borrowings, enabling it to service and redeem its debt. - (Reuters)