The European Commission approved the (
0,07 EUR, 0,00%) orderly resolution plan submitted by the Belgian, French and Luxembourg States on 14 December 2012.
Validation of the revised orderly resolution plan closes the in-depth enquiry launched by the European Commission on 21 December 2011 within the context of the State aid received by the Group in October 2011[3]. This new plan will replace the restructuring plan approved by the European Commission on 26 February 2010.
The required legal or regulatory provisions are expected to have been adopted by the Belgian and French States at the latest by 30 December 2012, and this decisive stage in the implementation of the Group's orderly resolution will permit execution of the € 5.5bn capital increase of SA voted by the company's shareholders at the Extraordinary Shareholders' Meeting held on 21 December 2012, to which the Belgian and French States have undertaken to subscribe. It will also enable the definitive tripartite funding guarantee scheme to be implemented within the limit of a € 85bn ceiling.
will thus be able to carry its long-term residual assets. This will avoid materialisation of the systemic risk which would be represented, at a
euro zone level, by the immediate dissolution of the Group and very significant value being destroyed by a too rapid sale, in a deteriorated market, of assets with good credit quality.
will make a detailed communication regarding all the undertakings made by the Group within the framework of the revised orderly resolution plan on receipt of the decision from the European Commission.
Our View:
With the € 5.5bn capital increase and the amended resolution plan now being approved by EC, we consider the shares to be worthless.
Conclusion:
We maintain our Reduce recommendation and € 0.01 target. 0.10.10.20.20.30.30.4JFMAMJJASOD525456585106PriceRel. to index (RHS)