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Fortis denies liquidity crisis

 Fortis denies liquidity crisis
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Fortis has been strongly denying it has liquidity problems.

Worried investors have been dumping the Belgian-Dutch financial services group’s shares which lost a quarter of their value this week.

But Fortis’ chief executive, Herman Verwilst, said the share price does not reflect the real worth of the company: “We of course are flabbergasted by what is reflected in the market capitalisation of our company which seems to be associated in some people’s mind with the value of the company.”

Fortis’ shares are down over 65% this year, but they really went into free fall in June as it announced plans to raise its capital by eight billion euros including selling 1.5 billion euros worth of new shares.

The Belgian authorities are trying to reassure investors that the rumours are unfounded. Finance minister Didier Reynders said: “I am sure that it is very difficult to send a message to the investors right now because everybody is being prudent and it is normal to do that. But we ask only that they don’t send any rumours to the market. We need to work on the basis of correct information and it is difficult enough to manage the crisis without any false information in the market.”

Fortis said its solvency is solid with a funding base of 300 billion euros.

It is also in talks to sell assets that would raise five to ten billion euros to bolster it capital.

There is however increasing speculation Fortis could become a takeover target.