26.10.2008 14:52 Fortis suits will not help shareholders-NBB deputy BRUSSELS, Oct 25 (Reuters) - The deputy chief of Belgium's central bank warned shareholders challenging the state-led break up of troubled financial group Fortis (News/Aktienkurs) that there was nothing more Belgium could do or could have done.
'I think you are dreaming if you think the deal can be undone and that Fortis can continue on its own. It is totally unrealistic,' Luc Coene told Belgian broadcaster VRT on Saturday.
'It would be a disaster if the deal were reversed. Fortis is not capable of surviving in the current difficult market conditions,' he continued.
Fortis was carved up by the Dutch, Belgian and Luxembourg governments this month with BNP Paribas buying 75 percent of the Belgian operations after an 11.2 billion euro ($14.1 billion) cash injection failed to calm investor concerns.
Belgium reassured Fortis depositors and gave some confidence to staff at the nation's largest private sector employer.
However, shareholders have seen Fortis stock drop from almost 30 euros in April 2007, before their ill-fated partial purchase of Dutch ABN AMRO, to less than 1 euro now.
Angry shareholders have argued the break-up of the group required their approval and a number have launched or threatened to launch legal challenges in the Netherlands and Belgium -- in the latter against the state's deal with BNP.
Coene said that BNP had been the only interested party and the government had turned down its initial offer. Nationalisation, he argued, had never been a realistic option.
'For the state it was hardly an option to take over a bank whose management had lost all credibility in the financial markets and which was literally going down,' he said. 'You don't solve the problems through nationalisation.'
His comments partially echo those of Finance Minister Didier Reynders, who said on Friday that Belgium did more for Fortis than for rival Dexia.
The latter was granted state guarantees for its borrowing. Some Fortis shareholders have argued Fortis could have been saved by such action.
The various deals have left Fortis Group with only its international insurance business and a 66 percent share of a 10.4 billion euro portfolio of structured credit products.
The Belgian government has offered shareholders a coupon, limited to 5,000 per holder, giving them the right to any profit it makes on its 11.6 percent stake in BNP Paribas in 2014. The payment will be no higher than 8.96 euros.
(Reporting by Philip Blenkinsop, editing by Anthony Barker) ($1=.7945 Euro) Keywords: FORTIS/
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