ING repays euro5.56B in bailout money to Dutch state

[December 11, 2009]  AMSTERDAM (AP) -- ING Groep NV, the Dutch bank and insurer, said Friday it will repay euro5.56 billion ($7.4 billion) in government bailout money on Dec. 21 with cash raised from investors.

That's half of the euro10 billion, plus interest, that ING received from the Netherlands in one bailout package last year.

The company is paying the state back with proceeds from a euro7.5 billion share issue.

"After repaying half of the funds we received last year from the Dutch state, we will work now toward repaying the second half," said CEO Jan Hommen.

He said the company would use regular earnings and money raised from divestments for that.

Until it repays the aid in full, ING is barred from buying other firms and from undercutting rivals with lower prices or more favorable interest rates, and it must get EU approval to repay hybrid and subordinated debt capital.

ING is using another euro1.3 billion of the money raised in the share issue to pay for its other bailout package, a complicated transaction by which the Dutch assumed most of the risks and benefits of ING's portfolio of mortgage-backed securities.

European Union competition authorities said the state had overpaid in that deal, amounting to unfair support for ING.

ING has also agreed to sell its insurance operations, which are roughly half its business, under pressure from the EU

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On the Net: http://www.ing.com/

[Associated Press]

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