What has Fortis management done?
- it has misinformed shareholders
- it has consistently denied rumours and statements by analysts that a capital increase would be necessary to strengthen the balance sheet.
- it has consistently informed the market that the direct and indirect effects of the subprime crisis and the credit crisis were limited or under control.
- It said on September 26th 2008 that withdrawals by Fortis clients from their savings accounts were limited and the company was not in trouble.
- It has stated (for example on June 5th 2008) that the balance sheet was healthy.
- It promised shareholders an unchanged dividend which promise was not kept.
- It has provided wrong information on the position of the European Committee, claiming it had refused a request for more time to sell assets.
- it has mismanaged the company during these crisis times. Management
- has lost credibility in the financial community
- did not take appropriate action in time
- lost control over the process.
- Managements actions have resulted in:
- despite two share issues (13.4 billion and 1,5 billion) a decrease in market capitalisation of more than 30 billion euro
- write downs of in total:
- March 7th 2008 2,4 billion euro pre-tax impairment on CDO subprime portfolio
-May 13th 2008: 1st Quarter 2008: 380 million euro net of tax impact of credit market turmoil
-August 4th 2008: 2nd Quarter 2008: 362 million euro net of tax impact of credit market turmoil
-September 29th 2008: Value adjustments in the third quarter of approximately 5 billion euro.
- a nearly complete dismantling of the company
- the consequences for shareholders are:
- a decline in the NAV (net equity per share) from 12,5 to 3,5 in two months.
- a decline in the shareprice from 18,08 (ultimo 2007) to currently 5.41 euro.
- Fortis shareholders now are left with as stake in a company with:
1) a 66% stake in a structured product portfolio worth around 6,8 billion euro
2) a 100% stake in Fortis Insurance International with a value of approximately 1,5 to 2,0 billion euro
