Investors Take Steps to Prevent Further Losses in the MCS

NEW YORK, Oct. 5 /PRNewswire/ -- Investment funds managed by QVT Financial LP and Third Point LLC (the "Investors") hold in the aggregate over 50 percent of the issued and outstanding Fortis euro 2,000,000,000 8.75% Mandatory Convertible Securities due 2010 (the "MCS").  On Friday, 1 October 2010, the Investors submitted proposed resolutions to BNY Corporate Trustee Services Limited, as Trustee for the holders of the MCS, proposing that the maturity date for the MCS be extended to 7 December 2030, or such earlier date as approved by the holders of MCS at a meeting to be held no later than 1 November 2010.  A second resolution, if passed, would cancel certain conversion features of the MCS.  In addition, also on 1 October 2010, the Investors filed a Writ with the Brussels Commercial Court, in which they are challenging the transfer by Fortis of almost all its activities without their consent, and arguing that the proposed resolutions, if approved by the requisite holders of MCS at the meeting, are binding on the relevant issuers of the MCS pursuant to both the Belgian Company Code and Schedule 3 of the Trust Deed governing the MCS.  

The MCS were issued by Fortis SA/N.V. and Fortis N.V (together, now Ageas), Fortis Bank Netherlands (now ABN AMRO) and Fortis Bank SA/N.V. (the "Issuers") on 7 December 2007 and the proceeds were applied towards the Fortis group's participation in the consortium which acquired the ABN AMRO group.  Under the existing terms governing the MCS, the securities are scheduled to be converted into approximately 107 million ordinary shares of Ageas on 7 December 2010.  Such a conversion at the current Ageas share price would crystallize the approximate 90% loss in the value of the MCS since their issuance. The resolutions have been proposed in order to prevent further losses to investors in MCS.  Further details regarding the background to the resolutions will be set out in a notice to holders of the MCS to be published by BNY Corporate Trustee Services Limited.

SOURCE QVT Financial LP and Third Point LLC