ING divests Canadian unit

ING Groep NV has sold off its 70% stake in its Canadian property/casualty unit, ING Canada Inc., in an attempt to bulk up its balance sheets. In the deal, the Amsterdam, Netherlands-based financial services giant will get 2.16 billion Canadian dollars for its stake in the company, entering into an agreement with a syndicate of underwriters to sell off a portion of the business through a “bought deal” Canadian public offering led by CIBC World Markets Inc. and TD Securities Inc., both of Toronto. A group of institutional investors will be able to purchase 36.02 million common shares at $25 (Canadian) per share through a private placement led by CIBC World Markets and The Goldman Sachs Group Inc. of New York. Yesterday, the syndicate of underwriters initially agreed to buy 34.16 million common shares at $26.35 (Canadian). The group was also given the opportunity to buy an additional 5.12 million common shares at the public offering price. When ING announced the sale, it said it would maintain a 7% stake in ING Canada, which is based in Toronto. Today, the carrier announced that it has agreed to sell that portion to the syndicate, amounting to an additional 8.6 million common shares, also at $26.35 (Canadian). “In the uncertain economic and market environment, we have structured a transaction with certainty of proceeds,” Jan Hommen, the interim chief executive of ING, said in a statement. “The proceeds from the transaction will be used to fortify ING’s capital position.” The sale of ING Canada marks the latest chapter in ING’s recent tumult. In recent weeks, the company has announced that it would cut 7,000 jobs after it gave estimates Jan. 26 that it would end the fourth quarter in the red, with a net loss of 3.3 billion euros. Then the company said that the Dutch government would back the risks behind ING’s 27.7 billion euro portfolio of Alt-A residential-mortgage-backed securities.