ING offers 50% discount in $11bn rights issue

ING, the Dutch banking and insurance group, has announced its shares will be steeply discounted in a rights issue it hopes will raise $11.2 billion.

The issue price for the shares has been set at €4.24 ($6.32), less than half the level of their closing value in Thursday trading, in which they stood at €8.92 ($13.30).

ING needs to raise the extra capital to pay off debts to the Dutch government.

It plans to repay $8.8 billion to the state, including $1.4 billion in interest, after receiving around $15 billion in bailouts in October 2008 and January 2009.

The European Commission has also ordered ING to pay the state back an additional $1.93 billion in fees.

Jan Hommen, ING chief executive officer, said: "This rights issue is a critical component of the measures we announced to regain our independence and to chart a clear course forward."

Earlier this week, Lloyds Banking Group offered a 60 per cent discount on shares in its own $22 billion rights issue.

By Tony Aynsley