SNS Reaal Says Private Deal on Capital Boost is "No Certainty"
01/31/2013| 02:58am US/Eastern
By Maarten van Tartwijk
AMSTERDAM--Dutch banking and insurance company SNS Reaal NV (>> SNS REAAL), which is struggling with distressed property loans, Thursday said it remains in talks with private investors on a capital boost but sought to quell speculation that a deal is imminent.
SNS Reaal, the Netherlands' fourth-largest bank by assets, is struggling with heavy losses on commercial-property loans, which have squeezed its capital position and ability to repay a 750 million euro ($1.0 million) government bailout received during the 2008 financial crisis.
The company is currently in talks with investors on a capital boost in a bid to fend off another government bailout or potential nationalization.
In a brief statement, SNS Reaal said negotiations are ongoing and that the involvement of private investors was "intensively" discussed over the past few days. "There is no certainty whatsoever that these talks will yield results," it said.
Newspaper Het Financieele Dagblad reported earlier Thursday that SNS Reaal is in talks to be taken over by a consortium led by private-equity group CVC Capital Partners. The consortium, which also includes Dutch pension manager PGGM, is willing to pay EUR1.8 billion for the financial company and boost its capital position, the daily wrote, citing unnamed sources.
If a deal is reached, the biggest Dutch banks by assets--ING Groep NV (>> ING Groep N.V.), Rabobank Group and ABN Amro Bank NV--are willing to inject EUR400 million in SNS Reaal's distressed property-loan portfolio. The capital boost would be shaped as a type of subordinated loan that would have the approval of European Union regulators, the newspaper reported.
The European Union previously blocked a plan to involve ING and ABN Amro over competition concerns.
SNS Reaal reiterated that, if the talks succeed, it will issue new shares and restructure outstanding subordinated debt.