ING Sets 70 Mln Share NN Group IPO To Raise Up To 1.5 Bln Euros

(RTTNews) - Dutch lender ING Groep N.V. (ING) announced Monday that it will sell 70 million existing ordinary shares in its insurance arm NN Group N.V. in an initial public offering at an estimated price range of 18.50 to 22.00 euros per share. The offering is expected to raise gross proceeds of up to 1.5 billion euros or $2.04 billion.

"Announcing the offer price range is another key step in NN Group's IPO process as it kick-starts the period during which NN Group's management will meet with potential investors and share NN Group's strategy, customer proposition and investment case," ING CEO Ralph Hamers said in a statement.

The company expects the NN Group ordinary shares to begin trading on Euronext Amsterdam on July 2, 2014 under the ticker symbol "NN." ING had confirmed its intention to proceed with the IPO of NN Group on June 5, 2014.

ING said it has granted the joint global coordinators, on behalf of the underwriters, a 30-day over-allotment option to purchase up to about 10.5 million additional shares in NN Group. ING intends to use the net proceeds from the offering for the reduction of ING Group's double leverage.

NN Group, currently a wholly-owned subsidiary of ING, is an international insurance and investment management company offering retirement, life insurance, non-life insurance, investment management and banking (in the Netherlands) to its customers across Europe and Japan.

The IPO consists of sale of existing NN Group ordinary shares currently owned by ING to institutional and retail investors in the Netherlands, and a private placement to certain institutional anchor investors in various jurisdictions.

ING had announced on April 30 that it secured pre-IPO investments for an aggregate sum of 1.275 billion euros from three Asia-based investment firms that includes RRJ Capital, Temasek and SeaTown Holdings International. The investment firms will participate in the IPO as anchor investors and also will be issued subordinated notes that ING Group will over time exchange into NN Group shares.

The anchor investors have also agreed to a lock-up on the shares that they will receive as a result of the exchange into NN Group shares of the first tranche of mandatorily exchangeable subordinated notes.

Following the closure of the IPO, ING's ownership in NN Group would decline to 73.6 percent, but will continue to be consolidated by ING.

The announcement is in line with ING's objective to divest its insurance and investment management businesses and become a pure bank. It has already disposed of insurance assets in the U.S., Latin America and Asia.

ING now plans to cut its stake in NN Group to below 50 percent before December 31, 2015 and to sell the remaining shares before December 31, 2016, in line with the timeline it has agreed with the European Commission.

However, ING noted that it retains full flexibility in the way it may execute the divestment of the remaining stake in NN Group post IPO.

ING said the offering, excluding the over-allotment option, would have an estimated negative impact on its shareholders equity of about 3.2 billion euros, which will be recorded in its third quarter 2014 results.

The divestment is also part of ING's ongoing asset or stake sale in order to comply with an agreement reached with the European Commission while getting approval for the 10 billion euro Dutch state aid during the financial crisis in November 2008. The EU had ordered ING to shrink its balance sheet significantly.

J.P. Morgan, Morgan Stanley, ING Bank and Deutsche Bank are acting as joint global co-ordinators for the IPO. BNP Paribas, Citigroup, Commerzbank, Credit Suisse and Nomura as well as the joint global coordinators are acting as the joint bookrunners for the IPO.

ING closed Monday's regular trading session at $14.16, down $0.09 or 0.63% on a volume of 1.77 million shares.