Belgium and Luxembourg were talking to several would-be buyers for troubled financial group Fortis (FOR.BR)(FOR.AS) and will send a strong signal before markets open on Monday, Belgian Prime Minister Yves Leterme said.
In a second weekend of crisis talks, Leterme told Belgian broadcasters on Sunday he hoped to keep the Belgian and Luxembourg operations of the group together after the Netherlands nationalized most of Fortis's Dutch units on Friday.
"There are contacts with private groups, several private groups. We are not going to decide in this situation with our backs to the wall," he said. "The only thing certain is that we are going to send a clear and strong signal to the markets before they open tomorrow.
Belgium and Luxembourg were left to deal with the remains of Fortis' banking and insurance operations after the Netherlands took over the Dutch activities for 16.8 billion euros ($23.28 billion) at the end of a week of turmoil for European banks.
Dutch Finance Minister Wouter Bos said the company had hit an acute cash crunch even after last week's initial 11.2 billion euro rescue by the three governments as depositors withdrew money and banks refused to lend.
The credit crisis has struck hard in Belgium, with bailouts required for Fortis, the largest private sector employer, and Franco-Belgian Dexia (DEXI.BR)(DEXI.PA), about whom new doubts surfaced on Sunday.
Belgian media said questions were being raised after German banks and insurers pulled out on Saturday of a state-led 35 billion euro rescue program for lender Hypo Real Estate (HRXG.DE), the parent of Dexia's rival public finance lender Depfa.
Leterme described Dexia as a "very solvent bank." Dexia, the recipient of a 6.4 billion euro public bailout on Tuesday, declined immediate comment.
FORTIS: NOT TO BE SOLD FOR A SONG
Dutch central bank governor Nout Wellink told Dutch television on Sunday that Fortis must be integrated with the Dutch parts of ABN AMRO that it bought last year at a top-of-the-market price before it could be privatized again.
"That also depends on the length of the financial crisis," he added.
Leterme insisted that the Belgian government would not simply sell the remains of Fortis off in a cheap, rushed deal.
"Fortis is an important and healthy company that has good future prospects. Out of respect for the staff we're not just going to sell it off for a song. There are other possibilities than just leaving it to a private partner," he said.
"On the other hand, we will calmly study every serious offer that offers the company a future," he added.
Separately on Sunday China's second-largest life insurer Ping An (601318.SS) said it would report an impairment loss of about 15.7 billion yuan ($2.3 billion) on its investment in Fortis.
Finance Minister Didier Reynders, also commenting on Belgian radio, said the next step would depend to a great extent on what Luxembourg decided after its capital injection last week in the form of a convertible bond.
"We'll see if the Luxembourg government goes further either by converting the bond or by going further and taking a bigger stake. We can keep the Belgo-Luxembourg company together," Reynders said.
A banking source close to the situation commented: "Maybe we'll end up with a Dexia-Fortis solution."
(Additional reporting by Foo Yun Chee and Niclas Mika in Amsterdam; Editing by Darren Ennis and Erica Billingham)
