Ping An sees hope in Fortis compensation

By Xu Shenglan (chinadaily.com.cn)
Updated: 2008-12-17 20:40

Ping An, China's second largest life insurance company, is set to reap further rewards from their 1.8-billion-euro investment in Fortis last year that saw them acquire a 4.18-percent stake in the company.

The Brussels Court of Appeals ruled on Dec 12 that the sale of Fortis assets to BNP Paribas must be put to investors for a vote before Feb 12, or the Belgian government will face a penalty of up to 5 billion euros.

The court also ordered Paris-based BNP Paribas, France's largest bank, to keep funding Fortis Bank to prevent a collapse before the vote.

"It's a substantial victory for shareholders," a lawyer said. If the transaction between Fortis and BNP is rejected by shareholders, BNP will probably raise the bidding price for Fortis, which will cushion Fortis' share price.

Thus, Ping An will undoubtedly benefit if Fortis' share price goes up.

Fortis announced on Monday that its shares would be suspended for two days pending a statement on the financial impact of the ruling. It will not have a significant negative impact on its current cash position, it added.

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