RRJ et al. invest €1.27bn in ING’s NN ahead of planned IPO

Alongside RRJ, Singaporean sovereign wealth fund Temasek and Temasek-owned SeaTown Holdings International have also agreed to invest €425m and €100m respectively.

Of the total, €150m will be used to purchase shares in NN at the time of the subsidiary's flotation at the IPO price. RRJ will purchase €88m of shares, while Temasek will pay €50m and SeaTown the balance of €12m.

ING has also received cash in exchange for €1.125bn of subordinated mandatory convertible notes with a 4% coupon, which will be issued to the three firms this month. The notes will be converted into NN shares over three tranches, the first of which will take place at the time of NN's IPO.

The first tranche of €450m will comprise an exchange for €264.7m of shares for RRJ, €150m for Temasek and €35.3m for SeaTown. The exchange price will be set at a discount of 1.5% to the final IPO price.

The second tranche of €337.5m will be converted at some point next year at ING's discretion. It comprises the exchange of €198.5m of shares for RRJ, €112.5m for Temasek and €26.5m for SeaTown.

The final tranche of €337.5m will take place either next year or in 2016, comprising the same amounts from each party as the second tranche.

NN's IPO is expected to take place sometime this year. If the subsidiary's public listing is delayed until 2015, the transaction with RRJ, Temasek and SeaTown will be unwound and the subordinated notes will be redeemed.

Hong Kong-based RRJ was founded in 2011 by Richard Ong, who established the Beijing-based $2.5bn Hopu private equity fund prior to founding RRJ. RRJ closed its first fund in June 2011 on $2.3bn and currently manages two vehicles with $5.9bn in capital.

Founded in 1845, NN is currently headquartered in Amsterdam but will relocate its headquarters to The Hague in 2015.

NN comprises ING's European and Japanese insurance and investment management operations, namely Nationale-Nederlanden, ING Insurance Europe, ING Investment Management and ING Life Japan.

The subsidiary employs 12,000 staff and recorded a result before tax of €103m in 2013. Its CEO is Ralph Hamers.

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