ING Hoping For Dutch Bailout With Sale Of Insurance Units

October 26, 2009 11:31 a.m. EST

Amsterdam, The Netherlands (AHN) - ING Group NV will sell its insurance units in a move to garner support for a bailout from the European Union, the company announced Monday.

Money raised from the sale will allow ING to repurchase 5 billion euros of core tier 1 securities held by the Dutch government. ING is hoping the European Commission will okay state aid of $10 billion euros and guarantees on 21.6 billion euros of mortgage assets.

The insurance companies will be sold over the next four years, either through sales to other firms or initial public offerings.

The company expects to get approval for the final restructuring plan before stockholders meeting on Nov. 25.

As of the end of the third quarter, ING has eliminated 10,400 jobs, about 8.3 percent of its workforce. ING said it expects to report a profit of 500 million euros for the third quarter after divestments and special items. It will take a 1.3 billion euro fourth quarter charge.

ING shares were down 13 percent about 10:30 a.m.

A separate unit, ING Direct USA also will be put up for sale to meet EC requirements, but that sale is not expected until the end of 2013.

The company also announced changes in several high-level decision makers.

Eric Boyer de la Giroday will become vice chair of the Management Banking Board while retaining his position as chief executive of commercial banking. Hans van der Noordaa will change his responsibility for Insurance Europe and Asia/Pacific to become CEO of Retail Banking Benelux.

Eli Leenaars will become CEO of Retail Banking Direct and International.

Tom McInerney will become chief operating officer for insurance, while Matt Rider, chief financial officer for global insurance operations, will join the board and become chief administrative officer.

Dick Harryvan, CEO of ING Direct, will take early retirement as of Jan. 1. He has been with the company since 1979.

Jacques de Vaucleroy will leave his position on the management board for insurance immediately, but remain as an advisor until Jan. 1.