Jean-Luc Dehaene has resigned his position as Chairman of the Board of Directors (BoD) as of 1 July 2012. He will be replaced by Karel De Boeck (already member of the Board) ad-interim. A new member of the Board, Bernard Herman has been appointed to replace Jean-Luc Dehaene. Karel De Boeck is destined to become the new CEO of the Dexia Group.
Pierre Mariani, CEO and Chairman of the Management Board of Dexia, has offered his resignation to the Chairman of the Board of Directors, who requested him to continue to fulfil his duties as Chairman and CEO of Dexia S.A. until after the approval of the semi-annual 2012 accounts and to ensure the chairmanship of DenizBank and Dexia Asset Management (DAM) until finalization of these transactions. According to press, Pierre Mariani would waive the early termination fee (€ 2.4m) and receive € 600K (his regular pay) for the 6 months he would stay on as CEO.
Finally, the Board of Directors has decided to adapt the governance bodies of Dexia SA to the new group perimeter by setting up a Management Board comprising a Chairman, a Chief Financial Officer and a Chief Risk Officer. This new organisation will take effect on 1 July 2012.
Dexia also entered into final negotiations with a view to the disposal of DAM, in which three international investors are still in competition.
Our View:
The resignations and proposed assignments are the next step in the unwinding of the Dexia Group. The main issue however, remains the long-term funding (€ 90bn) Dexia Group needs with a cost structure that allows it to have a positive carry on its run-off books and have a viable business model.
Conclusion:
We maintain our Reduce rating and € 0.10 target