THE HAGUE: Dutch giant insurer NN Group's share price shot up by 5.0 percent on opening trade Wednesday on the Amsterdam stock exchange, in one of Europe's biggest initial public offerings this year.
Leading Dutch banker ING is selling the NN Group as part of the final stages of restructuring to pay back a massive debt after a government bail-out during the 2008 banking crisis.
ING announced late on Tuesday it was selling 77 million ordinary shares in the IPO at 20 euros ($27.3) a share, in a deal the Amsterdam-based bank said would rake in around 1.5 billion euros.
NN Group's share price shot up by 5.35 percent by mid-morning on Wednesday, trading at 21.07 euros a share in a deal which will see ING retain a 71.4 percent majority stake in the NN Group -- for now.
After the IPO, ING plans to cut to half its ownership of NN and completely sell it by the end of 2016.
ING has already secured 1.275 billion euros in investment ahead of the IPO, it announced last month.
It valued NN Group at an offer price of 7.0 billion euros. The sale of NN Group forms part of ING's restructuring imposed on it by the European Commission after a 10-billion-euro ($13.7 bn) government bail-out during the height of the 2008 banking crisis.
ING has already ploughed back more than 13.5 billion euros into the state loan, received in October 2008 and is expected to pay one more instalment worth around 1.1 billion euros by May 2015.
So far, ING has sold businesses in Canada, Australia, New Zealand and Latin America and Asia as part of its restructuring.
NN Group is a leading Dutch insurer and investment management company that has branches in more than 18 countries, mainly in Europe and Japan.
It posted a before-tax turnover of 905 million euros last year. NN Group said it aimed at paying 175 million euros in dividends to shareholders by 2015.
"ING has kept momentum since it embarked on restructuring in 2009, selling insurance businesses from Mexico to Hong Kong," the bank said in a statement.
"This is one of the largest IPOs this year," added Tom Muller, an analyst at Theodoor Gilissen private bank in Amsterdam.
"The shares are doing well this morning because an IPO of the largest insurer in the Netherlands doesn't go unnoticed," he added.
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