ING to issue EUR 1.125 billion subordinated notes to RRJ Capital, Temasek and SeaTown
Notes are mandatorily exchangeable into NN Group shares in three tranches through 2016
ING to also sell shares in NN Group to each investor at intended IPO totaling EUR 150 million
ING Group has secured important investments into NN Group totalling EUR 1.275 billion ahead of NN Group's intended Initial Public Offering (IPO). In this context, ING Group has agreed to sell NN Group shares at the IPO to RRJ Capital, Temasek and SeaTown Holdings International (SeaTown), three Asia-based investment firms, and also to issue to these three investors subordinated notes that ING Group will over time exchange into NN Group shares.
"We are delighted with the commitment of RRJ Capital, Temasek and SeaTown to make these substantial investments into NN Group ahead of the intended IPO," said Ralph Hamers, CEO of ING Group. "This is a strong sign of the belief of each of these institutional investors in the attractiveness of NN Group as an investment proposition and of their confidence in the prospects of NN Group as an independent company."
As previously announced, ING Group is preparing NN Group, which comprises ING Group's European and Japanese insurance and investment management operations, for a base case IPO. Preparations are on track for a transaction in 2014, depending on market circumstances. Further announcements on the base case IPO of NN Group, including the capital structure, will be made as and when appropriate.
Under the agreed terms, ING Group will receive cash amounts of EUR 750 million from RRJ Capital, EUR 425 million from Temasek and EUR 100 million from SeaTown in exchange for (1) the allocation of NN Group shares from ING Group at the intended IPO of NN Group (the "anchor investment") and (2) subordinated ING Group notes, mandatorily exchangeable into NN Group shares over time. The combined proceeds represent an aggregate amount of EUR 1.275 billion of direct and indirect investments into NN Group shares.
The anchor investment in NN Group shares at the time of the intended IPO will total EUR 150 million, of which EUR 88 million by RRJ Capital, EUR 50 million by Temasek and EUR 12 million by SeaTown. There will be no lock-up on these NN Group shares which will be acquired at the IPO transaction price.
In May 2014, ING Group will issue to each of the investors in this transaction mandatory exchangeable subordinated notes for a total amount of EUR 1.125 billion. These notes will accrue a 4% coupon, and will be mandatorily exchangeable into NN Group shares in three tranches according to following schedule:
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ING Group has also agreed certain orderly market arrangements which will be appropriately disclosed in the IPO prospectus as and when that document is published. None of RRJ Capital, Temasek and SeaTown will have any special governance rights in NN Group as a result of these transactions.
The transactions are subject to the base case IPO of NN Group taking place in 2014. If the IPO does not take place in 2014, the transactions with these three investors will be unwound, and the subordinated notes will be redeemed.
RRJ Capital is an Asia-based investment management company. It currently manages two private equity funds with a combined size of USD 5.9 billion. RRJ Capital strategically focuses on the following sectors: Financial Institutions, Consumer, Energy, Food and Industrials.
Incorporated in 1974, Temasek is an investment company based in Singapore. Supported by 11 offices globally, Temasek owns a S$ 215 billion (USD 173 billion) portfolio as at 31 March 2013, with more than 70% of its underlying assets in Asia (including Singapore).
SeaTown, based in Singapore, is a wholly-owned subsidiary of Temasek and was established in 2009 as an investment manager focused on absolute returns. SeaTown seeks to achieve consistent, superior risk-adjusted investment returns with its core strategy in value investing across the capital structure in companies globally.
